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Global airlines seen to earn $4.1 billion in 2012
Published in The Saudi Gazette on 02 - 10 - 2012

SINGAPORE — The International Air Transport Association (IATA) raised its forecast for the global aviation industry on Monday, saying that it expected the airlines to earn $4.1 billion this year.
In its previous forecast announced in June, the IATA had projected a profit of $3 billion for the world aviation industry.
Speaking at a press briefing in Singapore, IATA Director General and Chief Executive Officer Tony Tyler said the IATA had raised its forecast largely as a result of the second quarter turning out better than expected.
IATA said the downside pressures on the global aviation industry have started to ease as progresses were made in the eurozone with policy actions to reduce the risks.
“Oil prices have eased, as supply increases from Saudi Arabia and the United States. Eurozone anxieties remain but the ECB's (European Central Bank) conditional promise to buy the debt of Spain and other troubled governments is a major step towards stabilization," the IATA said in its quarterly report.
Tyler said the operating profits of the airlines in the second quarter, which came after a tough first quarter and was close to those of the same quarter of the previous year, showed that consolidation is producing positive results. The asset utilization in the passenger segment was high across many markets.
He said net profit margins remained modest at 0.6 percent, down from 1.4 percent in 2011.
IATA said demand in the passenger market is expected to grow by 5.3 percent over the course of 2012, which is 0.5 percentage point better than was foreseen in the June forecast. It showed that passenger market was doing relatively well in the face of weak business confidence in the developed economies.
The tighter supply and demand conditions led to strong load factors which averaged 79.3 percent for January to August 2012.
The cargo segment, however, was not doing well, as demand fell into negative territory in the latest forecast from the 0.3 percent expansion in the June forecast. The cargo segment is expected to finish the year with a 0.4 percent contraction year on year.
In a regional breakdown, the European airlines are expected to post a loss of $1.2 billion, while Asia Pacific airlines are set to post a $2.3 billion profit.
The cargo demand in Asia Pacific was down 6.6 percent year on year in the first eight months of the year, while capacity was trimmed by only 2 percent. However, the soft cargo markets were more than offset by the relatively robust performance in passenger markets.
China continues to have the fastest growing major domestic market, with a growth of 9.4 percent year-on-year in the first eight months of the year. – Reuters


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