IN A year that has been marked by less-than-satisfactory growth from key emerging markets and an oil price spike linked to the Syrian crisis, IATA has readjusted its industry outlook for 2013.
Previously set at US$12.7 billion in June, IATA is now anticipating US$11.7 billion in profit for the full year.
As a region, Asia-Pacific’s outlook was also downgraded by US$1.5 billion to US$3.1 billion, thanks to slower growth among emerging markets.
IATA expects Asia-Pacific’s 6.9 per cent capacity expansion to outstrip the 6.6 per cent growth in passenger demand this year.
However, Tony Tyler, director general of IATA, points out that airline performance will likely remain strong as the industry absorbs the impact of cost increases, as a result of changes in industry structure through consolidation and joint ventures, increased ancillary sales and reduced new entry due to tight financial markets.
“Overall, the story is largely positive. Profitability continues on an improving trajectory. But we have run into a few speed bumps,” he said in a statement released by the association.
“Cargo growth has not materialised. Emerging markets have slowed. And the oil price spike has had a dampening effect. We do see a more optimistic end to the year. And 2014 is shaping up to see profit more than double compared to 2012.”
IATA has set its profit outlook for 2014 at US$16.4 billion internationally, while Asia-Pacific is forecast to earn US$3.6 billion due to the continued strength of the domestic Chinese market and benefits of restructuring in Japan.
The announcement of the revised forecast comes ahead of the United Nations’ ICAO triennial meeting in Montreal today, where the IATA will continue to urge ICAO member countries to jointly tackle carbon emissions.
Without a joint policy on carbon emissions, the European Union may impose unilateral action on airlines flying into the bloc that would penalise airlines on their carbon output (TTG Asia e-Daily, November 14, 2012).