Worldwide airline profits will fall by 40% this year from 2010, despite rising passenger numbers, due to the increasing cost of fuel.
The International Air Transport Association (IATA) forecasts a collective decline in profits of $6 billion year on year and suggests half the remaining profit of $9 billion will come from Asia.
IATA director general Giovanni Bisignani, speaking yesterday in Singapore, forecast a total airline revenue of $600 billion this year, but said the world’s carriers remain $205 billion in debt.
Bisignani said: “Our margins are pathetic – just 0.1% over the last 40 years. This is not sustainable.”
He said the market capitalisation figures of carriers showed the shift to the east. “The five largest airlines in the world by market capitalisation are Air China, the combined LAN [of Chile] and TAM [of Brazil], Singapore Airlines, Cathay Pacific and China Southern,” said Bisignani. “The profits and the money are in this region.”