Most airlines see better profits this year: Iata

Singapore Airshow 2010. Airline business confidence in January improved significantly. (AFP)

Seventy-six per cent of the world airlines expect profitability to improve over the next 12 months, according to the January Airline Business Confidence Index released by the International Air Transport Association (Iata).

The aviation trade body said it has seen a "significant improvement" in airline business confidence in January, citing its latest quarterly survey.

"A divergence was evident between more positive Asian airlines and more pessimism among European airlines but, for the first time since January 2008, a majority said profitability had improved in the last quarter of 2009," the aviation trade body said in a statement.

The study further reveals that airlines expect a significant narrowing of losses in 2010, but not necessarily a return to profit. Iata's forecast predicts that airline net losses will halve from $11 billion (Dh40.4bn) in 2009 to $5.6bn in 2010.

The Middle Eastern carriers would, meanwhile, see losses shrink to $300m in 2010, from a $1.2bn loss the region's airlines suffered in 2009, the aviation trade body said in its financial outlook for 2010.

But while airlines reported that unit costs remained relatively low in the previous quarter, a net balance of airlines are now expecting cost pressures to intensify over the next 12 months, according to the study.

However, there is more optimism over yields suggesting that an improvement in margins is expected, said Iata, adding that there was still a majority of airlines reporting lower yields in the previous quarter – but significantly smaller than in October with expectations for the next 12 months at a high.

 

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