The International Air Transport Association (Iata) has raised its profits forecast for global airlines in 2012 by a third to $4.1bn, due to efficiencies and consolidation.
However, this number is lower compared to last year’s $8.4 billion in profits. The Association announced that earnings are still in a critical level, because of the low margins. But IATA has positive prediction for 2013 when it expects profits to reach $7.5 billion. 2013 will be more financially stable. As a result, more people will travel and the fuel costs will drop.
This year airlines had to change some of their business practices in order to survive the global crisis. They invested in new aircrafts, planned and managed consolidating and capacity more cautiously and started using processes that are more efficient. However, the profits of the airline industry are still critical. In addition, the profit margins fail to cover the cost of the companies’ funds.
The margins for this year are predicted to amount to only 0.6%. Nevertheless, they are expected to increase and reach 1.1% in 2013. Carriers in the Asia-Pacific region are likely to make $2.3 billion. North American airlines, on the other hand, will probably gain only $1.9 billion.
Europe is still suffering from the debt crisis. As a result, the airline industry is also having some difficulties and its losses are likely to reach $1.2 billion by the end of 2012.
The International Air Transport Association includes 240 carriers who serve 80% of the global traffic.
