Airline post-tax profits for 2012 are likely to drop to $3bn compared to $7.9bn in 2011 according to the latest analysis from the International Air Transport Association (IATA).
But the airline cartel blames “concerns about the Eurozone” for the likely fall in returns.
It said: “We now base our forecast on the market’s view that the Eurozone sovereign debt crisis will intensify, weakening economic growth in the region further in the second half of this year.”
This is despite its financial forecast, released this week, reporting the continued strong expansion of passenger volumes and a fall in jet fuel and oil prices. IATA now predicts these will be $110 per barrel rather than the previously estimated $115.
IATA said while carriers in the US and Latin America were expected to generate more profits this year than last, this figure would be offset by “larger losses” in Europe and smaller profits in Asia-Pacific.
The forecast added: “Moreover, risks to our central forecast have risen with turmoil in the Eurozone threatening a banking crisis, of a much larger scale than assumed in the central forecast.
“Neither can risks to oil prices, from supply disruptions in the Middle East, be dismissed. These risks to airline profits remain skewed to the downside.”
The Association said that global RPKs were still expanding at an “above trend” rate of 6% and showed no signs of slowing down.
It said that if it were not for the weakness of the Eurozone, the outlook for carriers would be “more positive.”
IATA figures predicted a $1.4bn profit for American carriers this year with those in the Asia-Pacific region enjoying a surplus of £2bn and those in the Middle East and Latin America one of $0.4bn each.
But in Europe, it said carriers were likely to lose $1.1bn whose those in Africa were likely to return a loss of $0.1bn.
It concluded: “We see substantial downside risk to this central forecast. Upside is limited. We see a much greater chance of the Eurozone crisis deteriorating beyond the sovereign debt issues built into the central forecast, into a full scale banking crisis.
“A spike in the oil price also cannot be discounted, if the Iran situation leads to supply disruption.”