Just wanted to share the IATA Quarterly Report on Airlinen Industry outlook for next two years. Definite positive signs on improvement in the outlook.
- Expected Net Profit Forecast )- $12.9bn in 2013 and $19.7bn in 2014. It is significantly higher than the forecast made in Sept. ($11.7bn in 2013 and $16.4bn in 2014). The upward revision reflects lower jet fuel prices over the forecast period as well as improvements to the industryas structure and efficiency already visible in quarterly results this year.
- Passenger markets continue to outperform the cargo business which remains stagnant both on volumes and revenues.
- IATA expects 2014 to be a second consecutive year of strengthening profitability (beginning from 2012 when airlines posted a net profit of $7.4 billion).
- The anticipated $19.7 billion profit in 2014 would come on projected revenues of $743 billion. While this would be the largest absolute profit for the airline industryaoutstripping the $19.2 billion net profit that the industry returned in 2010 - it is important to note that 2010 revenues were $579 billion. The net profit margin in 2010 was 3.3%, some 0.7 percentage points higher than the 2.6% expected for 2014.
- Forecast Drivers
- Passenger Demand: Passenger demand is robust and passenger numbers are expected to reach 3.1 billion in 2013 and rise by 6% to 3.3 billion in 2014.
- Cargo Demand: Cargo demand remains largely stagnant. Airlines are expected to carry 51.6 million tonnes of cargo in 2013, increasing to 52.5 million tonnes in 2014. This modest increase in demand is expected to be offset by a decline in yields (-2.1% in 2014).
Report available here: