GLOBAL airlines cut their 2013 industry profit forecast by eight per cent to $11.7bn yesterday, citing weaker growth in parts of Asia and a worsening slowdown in freight demand.
The International Air Transport Association, which represents some 200 carriers, said the $1bn downgrade from its previous forecast for the whole industry in June also reflected a spike in oil prices driven by the Syrian crisis.
“The industry situation is not improving as quickly as we had expected,” IATA director general Tony Tyler said. “I should stress that this is still an improvement over the 2012 profit of $7.4bn.”
For 2014, IATA predicted a rebound in profits to $16.4bn on hopes of rising business and consumer confidence and a respite in oil prices. However, its chief economist warned any prolonged spike in fuel costs could upset this scenario.
IATA raised its forecasts slightly for North American and European airlines as US carriers consolidate and cut capacity, and Europe’s financial crisis shows signs of easing.
For Asia, which is set to become the leading power in aviation in coming years, IATA chopped a third off its forecast to $3.1bn.
IATA sees growth of just 0.9 per cent in air cargo traffic, which handles a third of the world's trade by value, compared with a previous forecast of 1.5 per cent and well below global passenger growth of five per cent predicted for this year.