IATA Predicts 1.3% Industry Growth Margin in 2013

18 Jan 2013

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The International Air Transport Association (IATA) has announced an upward revision to its industry financial outlook.

Speaking in Geneva, Switzerland, the director-general and chief executive of the organisation, Mr. Tony Tyler, said the prospects for 2013 would be largely unchanged from 2012.

He said net profits were expected to rise to $8.4 billion leaving the industry with a 1.3 per cent net profit margin.

“It is good that we are moving in the right direction, but the year ahead is shaping up to be another tough one for the industry,” said Tyler.
He said the largest driver of industry prospects was global economic growth, which is expected to strengthen only slightly to 2.3per cent in 2013.

For passenger traffic, he said, the demand in 2013 is expected to grow by 4.5 per cent (below the 5.3 per cent forecast for 2012) while yields are expected to deteriorate by 0.2 per cent, largely in response to lower fuel costs.

For cargo, Tyler said demand is expected to increase by 1.4 per cent (not enough to make up for the 2.0 per cent decline in 2012).

On regional performance, Tyler said North American airlines would post a combined net profit of $3.4 billion—the largest absolute profit among the regions and a $1.0 billion improvement on 2012 while Asia-Pacific carriers are expected to see net profits grow by $200 million to $3.2 billion in 2013.

He further said Middle East airlines were expected to see profits rise by $300 million to $1.1billion; Latin American airlines will see net profits rise by $300 million to $700 million while African carriers are expected to post a third consecutive year of break-even performance of 0.1 per cent.

He said macro-economic, geopolitical and policy risks to the outlook remained high and largely negative.

“We need to make sure that cash strapped governments understand aviation is a catalyst for economic growth and ensure that light touch regulation does not become a license for infrastructure providers to let costs get out of control. We will also maintain pressure on governments for important infrastructure improvements—including the Single European Sky so that hard-won cost efficiencies are not lost to battles with congestion,” said Tyler.

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