Airline profits pick up in 2012: Iata

Airlines will pull in sharply higher profits this year and next than previously expected, the International Air Transport Association (Iata) announced on Thursday.

The organisation told reporters in Geneva that airlines globally are now expected to post total profits of $6.7 billion (5.15 billion euros) this year, up from its previous estimate on October 1 of $4.1 billion.

Iata said the increase was mainly due to restructuring efforts in the airline industry, and had little to do with the overall economic climate, which remained depressed.

On October 1, Iata had already revised up its predictions from June, when it expected the industry to rake in just $3.0 billion this year.

The organisation also raised its outlook for 2013, with industry-wide profits now expected to tick in at $8.4 billion instead of the previously predicted $7.5 billion.

The net margin this year is meanwhile expected to stand at 1.0 percent and to swell to 1.3 percent in 2013.

In 2011, considered a good year, the net margin was 1.4 percent.

Iata cautioned meanwhile that the airline industry remained weak, pointing out that the revised profit estimate for 2012 was still far below the $8.8 billion pocketed last year.

And the expected 1.0-percent margin remained far below the 7.0 to 8.0 percent needed to cover the vast capital needs in the sector.

"It is good news that the outlook is moving in a positive direction. But let's keep the figures in perspective," Iata chief Tony Tyler said, pointing out that "the industry is keeping its head above water. But only just."

Broken down by region, the organisation said hard-hit European carriers were only expected to breakeven this year.

That is worse than the $400 million profit in 2011 but far better than the $1.2 billion loss Iata had expected in its October forecast.

North American carriers were meanwhile expected to end 2012 with a collective $2.4 billion profit, up from $1.7 billion in 2011.

And Asia Pacific airlines should post a net profit of $3.0 billion, down from $5.4 billion last year amid a weak cargo market and slower growth in China, Iata said.

Going forward, Iata said passenger numbers were expected to grow 4.5 percent next year, compared to 5.3 percent growth forecasted for this year.

"It is good that we are moving in the right direction, but the year ahead is shaping up to be another tough one for the industry,” Tyler said.

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