Friday, December 14, 2012
IATA: U.S. Airlines Will Lead Global Industry in Profits for 2013
The International Air Transport Association (IATA) in its annual global airline industry financial outlook predicted slightly higher profits for airlines worldwide, but said 2013 is "shaping up to be another tough one for the industry."
IATA expects U.S. airlines to post a combined net profit of $3.4 billion, a $1 billion improvement from 2012. The expected gains are mainly the result of restructuring and cost cuts taken by U.S. carriers to address weak economic growth, the group said.
“Prospects for 2013 will be largely unchanged from 2012. Net profits are expected to rise to $8.4 billion leaving the industry with a 1.3 percent net profit margin. It is good that we are moving in the right direction, but the year ahead is shaping up to be another tough one for the industry,” said Tony Tyler, IATA director general and CEO. “But the positive shift is not moving airlines anywhere near the 7 to 8 precent that would be needed to cover the industry’s cost of capital. It’s a tough business working hard to make it through tough times."
Airlines in the Asia-Pacific region are expected to post net profits of $3.2 billion, and airlines in the Middle East to see net profits of $1.1 billion. European and African carriers are expected to have another breakeven year in 2013, mostly due to economic uncertainty in Europe and “uneven” airline performance in Africa. More