ID :
208321
Tue, 09/20/2011 - 14:04
Auther :
Shortlink :
https://oananews.org//node/208321
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ASIA PACIFIC AIRLINES TO MAKE THE BULK OF INDUSTRY'S PROFIT OF US$6.9 BIL IN 2011
KUALA LUMPUR, Sept 20 (Bernama) -- Asia Pacific airlines will make the bulk
of the revised industry's profit expectations of US$6.9 billion this year from
US$4 billion on stronger than anticipated passenger demand, thanks largely to
the continud penchant for air travel.
Asia Pacific carriers are expected to chalk up US$2.5 billion in profits in
2011, which is the largest absolute profit compared with other regions, the
director-general and chief executive officer of the International Air Transport
Association (IATA) Tony Tyler said.
"It is very resilient region when it comes to air traffic," he said.
"Airlines are going to make a little more money in 2011 than we thought.
Desp ite the doom and gloom, people are travelling,” said Tyler, adding that
the
brisk passenger demand would help to compensate the stangant air freight sector
since the start of this year.
Oil prices have also remained consistent with the previous forecast of
US$110 per barrel, which is still higher than US$79.4 per barrel last year.
Although, the industry's outlook for 2012 remains weak with profits to fall
to US$4.9 billion as debt burdened western economies gear up for an extended
period of weak economic growth or worse, Asia Pacific would continue to be
profitable, he told Bernama during a teleconference from Singapore.
"Relatively stronger economic growth and some rebound in cargo will help
Asia Pacific airlines to maintain their 2012 profits close to 2011 levels at
US$2.3 billion. The rest of the industry will see declining profitability."
"The worst hit is expected to be Europe where the economic crisis means the
industry is only expected to return a combined profit of US$300 million. A long
slow struggle lies ahead,” said Tyler.
Geneva-based IATA, which represents some 230 airlines, said the industry's
financial performace is closely linked to the health of the world's economies
and the forecast is built around the global gross domestic product (GDP)
projected growth of 2.5 per cent this year falling to 2.4 per cent in 2012.
"Whenever GDP growth has slowed below two per cent, the airline industry has
lost money. We will be perilously close to that level at least through 2012.
The industry is brittle. Any shock has the potential to put us in the red."
He said the US$2.9 billion bottom line improvement for this year's outlook
is equal to about a half a per cent of revenue.
"And the margin is a paltry 1.2 per cent. Airlines are competing in a very
tough environment. And 2012 will be even more difficult,” said Tyler.
He said the industry did a good job in filling up the seats and managed
to restore passenger load factors back to the 2010 highs.
By July, the global passenger load factor stood at 83.1 per cent.
As for air freight, he said it has been stagnating since the start of the
year and IATA slashed its full-year volume growth projection from 5.5 per cent
to 1.4 per cent.
Airlines are expected to carry 46.4 million tonnes of cargo in 2011, down
from the previous forecast of 48.2 million.
Air freight volumes reached their post-recession peak in May 2010, largely
driven by re-stocking. July’s traffic was four per cent lower than that level.
It appears unlikely that a revival in air freight will begin before 2012.
However, for the Asia Pacific region a strong rebound in air freight is
expected late in the year continuing into 2012, IATA said in a report.
The shocks from the Japanese earthquake and tsunami continue to affect
supply chains and cargo markets, in which Asia Pacific carriers have the largest
market share, it said.
of the revised industry's profit expectations of US$6.9 billion this year from
US$4 billion on stronger than anticipated passenger demand, thanks largely to
the continud penchant for air travel.
Asia Pacific carriers are expected to chalk up US$2.5 billion in profits in
2011, which is the largest absolute profit compared with other regions, the
director-general and chief executive officer of the International Air Transport
Association (IATA) Tony Tyler said.
"It is very resilient region when it comes to air traffic," he said.
"Airlines are going to make a little more money in 2011 than we thought.
Desp ite the doom and gloom, people are travelling,” said Tyler, adding that
the
brisk passenger demand would help to compensate the stangant air freight sector
since the start of this year.
Oil prices have also remained consistent with the previous forecast of
US$110 per barrel, which is still higher than US$79.4 per barrel last year.
Although, the industry's outlook for 2012 remains weak with profits to fall
to US$4.9 billion as debt burdened western economies gear up for an extended
period of weak economic growth or worse, Asia Pacific would continue to be
profitable, he told Bernama during a teleconference from Singapore.
"Relatively stronger economic growth and some rebound in cargo will help
Asia Pacific airlines to maintain their 2012 profits close to 2011 levels at
US$2.3 billion. The rest of the industry will see declining profitability."
"The worst hit is expected to be Europe where the economic crisis means the
industry is only expected to return a combined profit of US$300 million. A long
slow struggle lies ahead,” said Tyler.
Geneva-based IATA, which represents some 230 airlines, said the industry's
financial performace is closely linked to the health of the world's economies
and the forecast is built around the global gross domestic product (GDP)
projected growth of 2.5 per cent this year falling to 2.4 per cent in 2012.
"Whenever GDP growth has slowed below two per cent, the airline industry has
lost money. We will be perilously close to that level at least through 2012.
The industry is brittle. Any shock has the potential to put us in the red."
He said the US$2.9 billion bottom line improvement for this year's outlook
is equal to about a half a per cent of revenue.
"And the margin is a paltry 1.2 per cent. Airlines are competing in a very
tough environment. And 2012 will be even more difficult,” said Tyler.
He said the industry did a good job in filling up the seats and managed
to restore passenger load factors back to the 2010 highs.
By July, the global passenger load factor stood at 83.1 per cent.
As for air freight, he said it has been stagnating since the start of the
year and IATA slashed its full-year volume growth projection from 5.5 per cent
to 1.4 per cent.
Airlines are expected to carry 46.4 million tonnes of cargo in 2011, down
from the previous forecast of 48.2 million.
Air freight volumes reached their post-recession peak in May 2010, largely
driven by re-stocking. July’s traffic was four per cent lower than that level.
It appears unlikely that a revival in air freight will begin before 2012.
However, for the Asia Pacific region a strong rebound in air freight is
expected late in the year continuing into 2012, IATA said in a report.
The shocks from the Japanese earthquake and tsunami continue to affect
supply chains and cargo markets, in which Asia Pacific carriers have the largest
market share, it said.
