Asia-Pacific powers upturn in airline profits

Berlin: Global aviation traffic is back to pre-recession levels, and the International Air Transport Association (IATA) on Monday revised its forecast for 2010 to a global profit of $2.5 billion from a loss of $2.8 billion in March.
The industry’s first profit since 2007 comes after a decade in which airlines have lost a cumulative $47 billion.
Asia-Pacific is powering the upturn with $2.2 billion in profit. This is more than double the previously forecast $900 million in March, and a major reversal from the $2.7 billion loss in 2009, said Giovanni Bisignani, director general and chief executive officer, IATA in his speech during the body’s annual general meeting.
Asia-Pacific carriers continue to benefit from strong regional growth. Against a global GDP growth expectation of 2.9%, the Asian economy (excluding Japan) is expected to grow by 7% this year. China will outpace that with an expected 9.9% GDP expansion.
Bisignani stressed the importance of Asia-Pacific region saying, “We developed this region into our largest market, [accounting for] one-third of all aviation.”
Bisignani said airlines are benefiting from a strong traffic rebound that is pushing the industry into the black.
Industry revenues are forecast to reach $545 billion in 2010, higher than 2009’s $483 billion, but below the $564 billion achieved in 2008. “We thought that it would take at least three years to recover the $81 billion (14.3%) drop in revenues in 2009. But the $62 billion topline improvement this year puts us about 75% on the way to pre-crisis levels,” Bisignani said.
08/06/10 Neha Rishi/Daily News & Analysis

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Categories: Foreign Jun 2010, Indian Aviation- In General Jun 2010