The International Air Transport Association (IATA) has predicted a rebound in profits to $16.4 billion in 2014 on hopes of rising business and consumer confidence and a respite in oil prices.
IATA, which represents some 200 carriers, has revised its 2013 global industry outlook downwards to $11.7 billion on revenues of $708 billion.
Middle East carriers are expected to post profits of $1.6 billion which is marginally ahead of the $1.5 billion previously forecast.
The region’s efficient hubs continue to support strong performance on long-haul markets. And the impact of the Syrian crisis has been limited.
Passenger demand is expected to grow by 10.5 percent, the strongest among all regions. But this will be slightly outstripped by capacity growth of 11.3 percent.
“The industry situation is not improving as quickly as we had expected,” Tony Tyler, IATA director general, said.
“I should stress that this is still an improvement over the 2012 profit of $7.4 billion.”
“Emerging market growth in India, Brazil and to a certain extent China has been slower than anticipated,” Tyler told reporters on a conference call.
“This has been somewhat balanced by improvements in the US economy as well as a stabilization in the euro zone,” Reuters quoted him as saying.
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.
But Tyler said he was concerned about a US government attempt to block a proposed merger between US Airways and American Airlines, saying it contradicted a general shift away from regulation in air transport.
For Asia, which is set to become the leading power in aviation in coming years, IATA chopped a third off its profit forecast to $3.1 billion.
Although China’s domestic market continues to grow and Japan’s monetary expansion is boosting that country’s carriers, China’s international routes and Indian markets face pressure.
Asia is particularly exposed to stagnant growth in cargo markets that reflect weak international trade and an oversupply of plane belly capacity caused by growth in the passenger fleet.
IATA sees growth of just 0.9 percent in air cargo traffic, which handles a third of the world’s trade by value, compared with a previous forecast of 1.5 percent and well below global passenger growth of 5 percent predicted for this year.
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