IATA
Through
The Looking Glass
So what do you do if you
are IATA and every near-term projection points to a continued uncertainty
regarding the future for airlines?
With a projection created for 2050, won’t
most people who hear and read your predictions be either retired…
or dead?
Seriously.
IATA’s Director General and CEO, Giovanni
Bisignani, is confident:
“It is time to think big and to look
beyond the cycles and shocks,” he says.
“Our duty is to work together to define
a vision on which to build a sustainable future,” spoke the DG at
the 66th IATA Annual General Meeting and World Air Transport Summit in
Berlin.
“By 2050, we will have 16 billion
travelers and handle 400 million tons of cargo,” Bisignani assured.
“In just a couple of decades, we will
see the middle class nearly triple from the 1.3 billion today to 3.5 billion
people, a quarter of which will be in India and China.”
Mr. Bisignani said the industry should meet
in Singapore later this year to bring Vision 2050 into reality.
Stay tuned.
 In
the meantime, Brian Pearce, IATA Chief Economist, outlines the rest of
2010:
“We now expect the industry to make
a small profit of $2.5 billion this year, up from our previous forecast
for a loss of $2.8bn;
“The ash plume has dented the rebound
in demand but better than expected economic growth outside Europe has
led to upward revisions;
“IATA now forecasts passenger markets
to rise 7.1 percent this year and cargo by 18.5 percent, comparable to
the 1994 upturn but less than in 2004;
“Revenues are forecast to rebound
12.9 percent this year, though that still leaves revenues $9 bn lower
than in 2008 and there are large geographical differences;
“Most improved is North America, due
to capacity discipline and a better than expected economy, where profits
of $1.9 bn are now forecast;
“Asia-Pacific is the region with the
strongest economies and here airlines are expected to earn profits of
$2.2 bn this year.
“Latin American airlines do well with
a $0.9 bn profit and airlines in Africa and the Middle East are now expected
to break even.
“However, the ash plume and the Greek
crisis have worsened the situation for European airlines, now expected
to lose $2.8 bn.
“Oil prices have been rising until
recently.
“The outlook is uncertain.
“IATA sticks with our previous oil
price forecast of $79 b for 2010;
“The cyclical upturn outside Europe
has been stronger than expected but risks from new taxes, the Greek crisis,
excess capacity and oil prices remain.
“IATA forecasts a return on invested
capital of 2.8 percent this year, better than 2009 but half peak levels
and still far from reaching the industry's cost of capital.”
Geoffrey/Flossie |
