IATA has trimmed its collective industry profits forecast to $18 billion for this year, though this still marks a big improvement on the profitability in 2013.
The latest outlook, released today during the association’s AGM in Doha, marks a slight fall on the $18.7 billion profit IATA was forecasting in March. IATA points to a slight deterioration in the economic environment since March as world trade has slowed and business confidence has fallen amid concerns over China’s economic growth. The June forecast is based on GDP growth of 2.8% in 2014, a point lower than the March forecast.
IATA continues to see North American carriers generating the highest profit of all the regions. It sees profits of $9.2 billion for the region: $600 million more than it forecast three months ago, and meaning these carriers will contribute over half industry profits this year.
It has shaved $300 million off it profits projection for European carriers, to $2.8 billion for 2014. This still marks an improvement over the less than $1 billion European airlines made in the previous two years combined.
IATA has also trimmed $500 million off its forecast for Asia-Pacific carriers this year, to $3.2 billion. While an improvement on the $2 billion these carriers made last year, this shows how the region’s carriers continue to battle the stalling freight recovery.
Profits among Middle Eastern carriers are seen reaching $1.6 billion in 2014. The figure for Latin America is $1.1 billion, and for Africa, $100 million.
While $18 billion would mark a record profit for the industry in absolute terms, IATA chief economist Brian Pearce notes that profits margins were better in five of the last 20 years.
Source: Cirium Dashboard
