2011 TO BE PROFITABLE FOR AIRLINES BUT MINIMAL, SAYS IATA

KUALA LUMPUR, Jan 25 (Bernama) -- Despite expectations that 2011 will
continue to be profitable for airline companies, confidence in further
significant improvement is diminishing, the International Air Transport
Association (IATA) said Monday.

Quoting the findings of its January Airline Business Confidence Survey, IATA
said the outlook for the 12 months ahead remained positive, although loosening
demand-supply conditions and upward fuel cost pressures could slow down the
momentum for further boosts to profitability.

In a statement here Monday, IATA said more challenging demand-supply
conditions, with capacity and competition increasing on key routes, would tend
to soften revenue growth and underlying profits.

It said respondents to the survey also still reported concerns over the pace
and durability of the ongoing economic recovery and were increasingly wary of
upward pressures on fuel costs.

"While expectations on traffic point to continued expansion in demand,
responses to the latest survey indicate that profitability may be stabilising
rather than increasing further," IATA said.

It said 46 per cent of chief financial officers (CFOs) of the airlines
surveyed expect an increase in profits over the next 12 months compared to 60
per cent in the October survey.

Confidence in travel and cargo demand remaines strong with 77 per cent
expecting increasing passenger volumes and 60 per cent expecting higher cargo
volumes, it said.

IATA said the survey findings were consistent with its forecast of US$9.1
billion in profits for this year, a fall from the 2010 profit forecast of
US$15.1 billion, due to higher fuel costs.