Business World

Sunday 21 January 2018

Airlines 'will make bigger profits than predicted'

John Mulligan

John Mulligan

The global airline business will make more money this year than previously anticipated, to the International Air Transport Association (IATA).

It has revised its outlook for 2012, saying carriers are likely to make accumulated profits of $4.1bn (€3.1bn) this year.

That's higher than the $1.1bn to $3bn the IATA had forecast back in June.

"The fall in airline profits from the $8.4bn that the industry earned in 2011 will be cushioned by improved airline performance," said the association.

IATA director general Tony Tyler said that the recent quantitative easing announced in the US and Japan "will take time to yield growth", especially when the European debt crisis lingers and China's growth continues to moderate.

"While some of these risks have diminished slightly over recent months, they continue to take their toll on business confidence," he added, noting that the IATA's improved profit outlook for 2012 was a result of airlines "performing better in a difficult environment".

He said that improved performance has been evident in airlines' second-quarter results. They largely showed operating profits close to those achieved in the corresponding period in 2011.

"The evidence shows that consolidation is producing positive results," he said. "Asset utilisation in the passenger segment is high across many markets."

Mr Tyler said that even six years ago, generating profits with oil prices at $110 a barrel "would have been unthinkable".

"The industry has re-shaped itself to cope by investing in new fleets, adopting more efficient processes, carefully managing capacity and consolidating," he said.

Tony Tyler of IATA: 'risks . . . continue to take their toll on business confidence

Irish Independent

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