New Delhi: World airlines' body IATA today projected an over USD four billion hike in the global aviation industry profits this year compared to last year, saying the performance could have been better had it not been for the oil price hike and "disappointing" growth in key emerging markets.
The International Air Transport Association (IATA) said the global industry would earn net profit of USD 11.7 billion on revenues of USD 708 billion this year, compared to USD 7.4 billion in 2012.
However, it downgraded its earlier projection for this year of USD 12.7 billion profit to USD 11.7 billion due to the impact of the oil price spike associated with the Syrian crisis and disappointing growth in many key emerging markets.
The 2013 performance is considerably better than the USD 7.4 billion net profit of 2012. "The upward trend should continue into 2014 when airlines are expected to return a net profit of USD 16.4 billion. This would make 2014 the second strongest year this century after the record breaking USD 19.2 billion profit in 2010," IATA's latest industry outlook said.
"Airlines are demonstrating that they can be profitable in adverse business conditions. Efficiencies are being generated through myriad actions -- consolidation, joint ventures, operational improvements, new market development, product innovations and much more," IATA Director General and CEO Tony Tyler said.
The projections, released in Montreal by Tyler today, downgraded the outlook for Asia-Pacific airlines "by USD 1.5 billion to USD 3.1 billion profits" as it was largely driven by slower growth among the region's emerging economies.
"Asia-Pacific carriers are the largest players in global cargo markets and the most impacted by its flat performance," the analysis said.
This has been offset by a strengthening domestic market in China, while Japanese carriers were seeing a boost as a result of monetary expansion, favourable exchange rates and the impacts of industry restructuring, it said.
Tyler said only when market forces drove action "we get results that both strengthen the industry and benefit the consumer. Quite simply, stronger airlines can invest more in improving connectivity and service innovations.
"If more policy makers incorporated that into the cost- benefit analysis when developing regulations, we would have a much healthier industry generating even broader economic benefits," the IATA chief said.
First Published: Monday, September 23, 2013, 20:01