[090613.EN.AIR] IATA Boosts Profit Expectations, Narrower Cargo Declines Foreseen

THE International Air Transport Association (IATA), the global airlines industry association, is to increase global airline profitability by US$2.1 billion to $12.7 billion for 2013, up from 2012's profit of $7.6 billion.

Passenger will lead profit gains rather than cargo. Freight volumes are likely to be subdued at 52.1 million tons showing little growth compared to 2010's 50.7 million tons. Cargo yields are forecast to drop by two per cent bettering last year's decline of 6.3 per cent, said IATA.

The profit growth is due to revenue growth forecast of US$711 billion and a profit margin, although slight at 3.3 per cent, at its highest in more than a decade and above 2007's high of 2.9 per cent.

Jet fuel is a significant outlay at $108 per barrel of Brent crude, slightly down on last year's $109.50, and a huge difference in a 55 per cent hike in prices from 2006's $65.10 per barrel creating a 23 per cent increase in airline unit costs for the airline industry.

The economic situation in Europe continues to cast a shadow on trade growth in developed economies but global trade has increased to four per cent from last year's 2.25 per cent. Global GDP growth is half the rate of 2006 and likely to end 2013 up 2.2 per cent, forecasts IATA.

Source : HKSG.