IATA has predicted that airlines will go back into credit this year as economic green shoots appear but has warned that it isn’t exactly all blue skies ahead.
The organisation’s director general and chief executive Giovanni Bisignani has predicted a $2.5 billion global profit but said this was actually just a net margin of 0.5%.
He explained: “A major part of the global industry is still posting big losses. A stagnating economy, strikes, natural disasters, and a currency crisis have left European carriers struggling with an anticipated $2.8 billion loss.”
Bisignani said Europe was suffering the most acutely of all the global regions, thanks to the unexpected volcanic ash crisis of the past few months – it was responsible for some 70% of a $1.8 billion loss in revenue.
However, IATA said there was a recovery in passenger numbers in May in Europe.
Bisagnani said global recovery was happening faster than expected. Passenger traffic is predicted to grow by 7.1% this year and IATA believes that business travel is playing a large part in this as leisure travellers still remain cautious.
