World airlines are expected to post a net profit of $6.9 billion this year as stronger passenger numbers offset the impact of the weak global economy, industry group International Air Transport Association (IATA) said on Tuesday.
The new forecast by the IATA was better than its original projection of $4.0 billion made in June.
Net profit for next year is expected to weaken to $4.9 billion due to the expected deterioration of global economic conditions, IATA director general and chief executive Tony Tyler told a news conference in Singapore.
Global airlines earned $16 billion in 2010 as the world economy emerged from a financial crisis that began in late 2008 and lasted well into 2009. “Airlines are going to make a little more money in 2011 than we thought,” Tyler said.
“Given the strong headwinds of high oil prices and economic uncertainty, remaining in the black is a great achievement.” IATA said in a statement that “passenger demand has been stronger than anticipated given the gloomy economic outlook.”
In the seven months to July, passenger volumes were up more than 6.0% over the year before, IATA said, adding however that cargo had stagnated because of a slowdown in world trade.
Despite revenues seen at $594 billion, fuel prices continue to be a drag, with a projected total fuel bill of $176 billion seen to account for 30% of industry costs, the industry association said.