Profits up, but IATA worried about oil

Strong demand for air travel is expected to offset rising fuel prices this year, but the International Air Transport Association has warned the situation may not continue for long.
IATA has increased its 2007 profit estimate for the world's airlines to $US5.6 billion ($6.74 billion), despite forecasts that the average price of oil for the year would rise from $US63 a barrel to $US67 a barrel.
The international airline umbrella group sees clouds gathering on the horizon.
"While we are more optimistic for 2007, the continuing high price of oil combined with turmoil in credit markets is a cause for concern in 2008," IATA director-general Giovanni Bisignani said. "The industry net profit for 2008 is forecast at $US7.8 billion, down from the $US9.6 billion predicted in June.
"The impact of the credit crunch puts some question marks over the industry's performance next year and the continuing high price of fuel will become more difficult to (offset) with efficiency gains."
The regional outlook is mixed, with capacity increases and sluggish cargo growth blamed for poorer yields in the Asia-Pacific and a fall in absolute profits from $US1.2 billion in 2005 to $US700 million in 2007.
28/09/07 Steve Creedy/The Australian, Australia

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Categories: Foreign Sep 2007, General Aviation Sep 2007