Airline profits to rise amid recovery of cargo sector
Asian carriers to benefit most from resurgent freight market, aviation body says, as it foresees a brighter 2013 than was previously forecast
A rebound in cargo volumes and growing passenger demand has led a global airline lobby group to raise its forecast for airline profitability and revenues this year.
The International Air Transport Association (IATA), which represents 240 airlines comprising 84 per cent of global air traffic, said airlines are on course to post total net profits of US$10.6 billion this year, up from December's forecast of US$8.4 billion. Total revenues are projected to climb by US$12 billion to US$671 billion this year.
IATA said the new projection follows brighter prospects for the air cargo and passenger markets in the last three months, with the forecast for 2013 global gross domestic product growth being raised to 2.4 per cent amid a rebound in airline stocks, which have risen by 7 per cent.
But Tony Tyler, IATA director-general, cautioned there was a similar improving trend at the end of 2011 and early 2012 but the recovery "lost steam".
He said Asia-Pacific carriers would generate US$4.2 billion in net profit this year. This compares with December's projection of US$3.2 billion and reported profits of US$3.9 billion for last year.
Brian Pearce, IATA chief economist, said "a significant amount" of Asian airlines' profit would come from the resurgence in cargo volumes. He said there are "very encouraging signs" in the airfreight market and that the downturn had bottomed out, with the sector "starting to get positive".
Tyler said Asian carriers, such as Cathay Pacific Airways and Singapore Airlines, would benefit the most from the cargo recovery because they comprise about 40 per cent of the airfreight market.
