A recent uptick in global demand means airline losses in 2010 will be less than expected, and even 2009 losses are being revised downward, according to the International Air Transport Association.
IATA has cut its 2010 net loss estimate to $2.8 billion in its latest industry forecast, down from the $5.6 billion deficit it was predicting in December. Last year’s loss is now projected to be $9.4 billion, versus the earlier estimate of $11 billion.
The major driver of these revisions is stronger-than-expected traffic growth at the end of 2009 and in the first few months of this year. This improvement is not evenly spread, however – carriers in the Asia-Pacific and Latin America regions are seeing a faster recovery than their European and North American counterparts.
IATA Director General Giovanni Bisignani notes that the forecast “is still a loss, so it is too early to party.” However, he adds that “we can clearly see from the numbers that the industry situation is improving.”
Global passenger traffic is now expected to rise 5.6% this year, compared to the December forecast of 4.5% growth. Likewise, cargo traffic is predicted to increase 12%, versus the earlier mark of 7%. Both of the new estimates would mark a dramatic turnaround from the 2009 decrease of 2.9% for passenger traffic and an 11.1% drop for cargo.
IATA previously saw passenger yield relatively unchanged for this year, but improving demand has prompted it to forecast a 2% gain, compared to a 14% drop in 2009. Premium yields remain a concern, however, and are still 20% below 2008 levels. Bisignani says this could still indicate a structural shift away from premium seats.
There are still considerable risks to the industry outlook, IATA says. For example, there remains “latent capacity … that will limit the upside for yields this year.” Rising oil prices could also be a problem, and IATA has raised its 2010 estimate to $79 per barrel, up from $75 per barrel.
Asia-Pacific carriers are now expected to post a combined profit of $900 million, a considerable boost from the December forecast of a $700-million loss. A profit of $800 million is forecast for Latin American airlines, up from the previous estimate of a $100 million gain.
North American airlines are expected to lose $1.8 billion, with a $2.2 billion loss forecast for European carriers. These deficits are only down slightly from the December estimates of $2 billion and $2.5 billion. Losses of $400 million and $100 million, respectively, are predicted for Middle East and African airlines.
