A rare chink of sunshine in the otherwise gloomy skies over the global aviation industry has been provided by the International Air Transport Association (IATA) today, as the organisation halved its loss forecast for 2010.
The Montréal-based group now predicts the industry will lose US$2.8 billion over the course of 2010; compared to the US$5.6 billion loss forecast in December 2009.
The improvement has largely been driven by a much stronger recovery in demand; illustrated by year-end gains that continued into the first months of 2010. Relatively flat capacity translated into some yield improvement and stronger revenues, explained the IATA.
IATA also lowered its 2009 loss estimate to US$9.4 billion from the previously forecast US$11.0 billion loss.
“We are seeing a definite two-speed industry,” explained IATA’s director general Giovanni Bisignani.
“Asia and Latin America are driving the recovery. The weakest international markets are North Atlantic and intra-Europe which have continuously contracted since mid-2008.”
Hong Kong’s Cathay Pacific this week announced it had returned to profitability for 2009.
Improvements in the aviation industry have been driven by the economic recovery in the emerging markets of Asia-Pacific and Latin America.
Carriers in these region posted international passenger demand gains of 6.5 per cent and 11 per cent respectively in January. This compares to airlines in North America and Europe, which are lagging behind with international passenger demand gains of 2.1 per cent and 3.1 per cent respectively for the same month.
As the global economic slump has unfolded, airlines with the strongest focus on premium travel have been among the hardest hit.
The IATA warned last year the fall in demand in this sector may be “structural” rather than “cyclical” and thus may not recover.
Recent trends, however, suggest this fear may have been unfounded; with premium travel, while slower to recover than economy travel, now following a cyclical recovery in volume terms.
That said; demand it is still 17 per cent below the early 2008 peak, while premium yields, which are 20 per cent below peak, may still be suffering a structural shift.