The global aviation industry that was reeling under the huge surge in oil price two years ago and then had to face a battering from the worst economic recession since WWII, is now on the rebound, but not Europe.
The International Air Transport Association (IATA) said that it expects airlines to post a global profit of $2.5 billion in 2010. This is a major improvement to the $2.8 billion loss forecast by it in March 2010 (See: IATA strikes upbeat note on airlines industry earnings).
''Seeing black on the bottom line is a great achievement. The resilience of the industry has been strengthened by a decade of cost cutting, restructuring and re-engineering processes. IATA's programs have contributed to this with $47 billion in cost savings since 2004 with efficiencies in safety auditing, fuel management, infrastructure costs, and Simplifying the Business,'' said Giovanni Bisignani, IATA's Director General and CEO.
''The $2.5 billion profit comes with some important health warnings. First, this represents a net margin of just 0.5 per cent, which is a long way from sustainable profitability.
Second, a major part of the global industry is still posting big losses. A stagnating economy, strikes, natural disasters, and a currency crisis have left European carriers struggling with an anticipated $2.8 billion loss, said Bisignani.
The industry saw revenues drop by $80 billion or 15 per cent in 2009 and IATA initially forecasted that it would take three years or more for the aviation industry to recover, but IATA now expects 2010 revenues of $545 billion, up from the $483 billion in 2009, but still below the $564 billion achieved in 2008.