It says that net profit margins of just 1,2% are still exceptionally low when viewed against the turnover for the airline industry of $594-billion for the year. It says that airlines will make a little bit more money than it had previously forecast but given the high oil prices and the widespread economic uncertainty the outlook for airline companies remained gloomy.
IATA's director-general and chief executive Tony Tyler says that the $29-billion improvement in profits for the year is miniscule and amounts to about half a percent of total revenue. He expects next year to be even more difficult for airline operators.
The forecast is based on global economic growth of about 2,4% but the reality is that economic growth worldwide has fallen to below 2% and whenever this has happened in the past, Tyler says, airline operators have started to lose money.
IATA says that African operators are expected to break-even in 2011 from a $100-million loss in its previous forecast. It says that Africa has been hurt by the political unrest and wars in North Africa and this will dent profitability.
Moreover, growing competition from international carriers on popular routes are making it more challenging for African airline operators to maintain profits.
