KUALA LUMPUR, March 12 (NNN-BERNAMA) — The International Air Transport Association (IATA) has halved its 2010 loss forecast for the global aviation industry to 2.8 billion USD from its earlier projection of a 5.6 billion USD.
The improvement is largely driven by a much stronger recovery in demand seen at the end of 2009 that which has continued into the first months of 2010, says IATA.
“Relatively flat capacity translated into some yield improvement and stronger revenues,” it said in a statement released in Geneva on Thursday.
IATA also lowered its 2009 loss estimate to US$9.4 billion from the previous estimate of US$11.0 billion.
Improvements were driven by economic recovery in the emerging markets of Asia-Pacific and Latin America whose carriers posted international passenger demand gains of 6.5 per cent and 11.0 per cent respectively in January.
North America and Europe are lagging with international passenger demand gains of 2.1 per cent and 3.1 per cent respectively for the same month.
“We are seeing a definite two-speed industry. Asia and Latin America are driving the recovery. The weakest international markets are North Atlantic and intra-Europe which have continuously contracted since mid-2008,” IATA’s director general and chief executive officer Giovanni Bisignani said.
Passenger demand, which fell by 2.9 per cent in 2009, is expected to grow by 5.6 per cent in 2010. This is an improvement on the previous forecast of 4.5 per cent growth made in December 2009
Cargo demand, which fell by 11.1 per cent in 2009 is expected to grow by 12.0 per cent this year. This is significantly better than the previous forecast of 7.0 per cent growth.
Airlines kept capacity relatively in line with demand throughout 2009. A strong year-end recovery pushed load factors to record levels when adjusted for seasonality. By January the international passenger load factor was 75.9 per cent while cargo utilisation was at 49.6 per cent, IATA said.
On the other hand, tighter supply and demand conditions are expected to see yields improve — 2.0 per cent for passenger and 3.1 per cent for cargo. This is a considerable improvement from the 14 per cent fall experienced by both sectors in 2009.
As for fuel, IATA raised its expected average oil price to US$79 per barrel from the earlier forecast of US$75. That is an increase of US$17 per barrel on the US$62 average price for 2009.
The combined impact of increased capacity and a higher fuel price will add US$19 billion to the industry fuel bill bringing it to an expected US$132 billion in 2010. As a percentage of operating costs, this represents 26 per cent, up from 24 per cent in 2009.
Revenues will rise to US$522 billion, up by US$44 billion from previous forecast and a US$43 billion improvement on 2009.
“Revenues are half-way to recovery – US$42 billion below the 2008 peak and US$43 billion above the 2009 trough. Important fundamentals are moving in the right direction. Demand is improving. The industry has been wise in managing capacity. Prices are beginning to align with the costs-premium travel aside.
“We can be optimistic but with due caution. Important risks remain. Oil is a wild-card, over-capacity is still a danger, and costs must be kept under control-throughout the value chain and with labour,” said Bisignani.
Asia-Pacific carriers will see the US$2.7 billion 2009 loss turn to US$900 million in profits on the back of a rapid economic recovery being driven by China.
Cargo markets are particularly strong with long-haul cargo capacity for shipments originating in Asia experiencing a capacity shortage. Demand is expected to grow by 12 per cent in 2010. — NNN-BERNAMA
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