Airlines are expected to make a $6.9bn profit this year – up from its estimate of $4bn in June – the International Air Transport Association (IATA) said today (September 20).
But it warned that profit levels in an industry with revenues of $594bn were still “exceptionally weak.”
Looking ahead, IATA’s first prediction for 2012 is that the industry will make a profit of $4.9bn on a turnover of $632bn.
Tony Tyler, the Association’s director general and ceo, said it was good news that the airline industry would make “a little more money in 2011 than we thought.”
He added: “Given the strong headwinds of high oil prices and economic uncertainty, remaining in the black is a great achievement,”
But he was fearful for the future. “But we should keep the improvement in perspective. The $2.9bn bottom line improvement is equal to about a half a percent of revenue. And the margin is a paltry 1.2%.
“Airlines are competing in a very tough environment. And 2012 will be even more difficult,” he said
The IATA forecast is based on the growth in the world GDP falling from 2.5% in 2011 to 2.4% next year.
“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,” Tyler said.