AIRLINES' FINANCIAL PERFORMANCE TO BE HIT MOST, SAYS IATA

KUALA LUMPUR, Sept 7 (Bernama) -- The airline industry, which saw its share prices plunge in August and September, is expected to be hit more than most sectors in the expected weaker economic environment.

Financial markets have cut their valuations of airlines by around
one-quarter since the start of the year, the International Air Transport Association (Iata) said, citing that airline share prices fell nine per cent in August.

It fell a further five per cent in early September as measured by the Bloomberg global index, said Iata in a statement on Tuesday.

It said the airline industry typically earned 80 per cent of its profits in the second and third quarter of a year, with seasonal losses in the first quarter and a weaker fourth quarter.

"So far 2011 second quarter net profits have totalled US$1.8 billion, which is almost 60 per cent down on last year," said Iata, which represents some 230 airlines comprising 93 per cent of scheduled international air traffic.

Iata anticipates global industry profits of US$4 billion for 2011, a staggering 78 per cent decline from 2010.

During the first half of the year the industry broke even, compared
with a net profit of around US$3 billion during the same period in 2010, it said, adding that the deteriotion in profits was widespread.

"The support for air travel from world trade, business and consumer
confidence has slumped," it said, adding that air freight volumes continue to stagnate as overall world trade has stopped expanding.