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    11 June 2012| last updated at 10:43AM

    Airline profits to plummet in 2012: IATA



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    BEIJING: Airline industry group IATA today forecast global profits would plummet by more than half in 2012 due to high oil prices and the ongoing eurozone crisis.

     

    “2012 is another challenging year. We expect revenues of US$631 billion but a  profit of just US$3.0 billion,” IATA head Tony Tyler told the group’s annual  general meeting in Beijing — according to a copy of his speech — confirming a  previous forecast made in March.
       
    This compares with a 2011 profit of US$7.9 billion, International Air  Transport Association figures show.
       
    Tyler cited high oil prices as one of the main reasons for “anaemic global  profitability” — with the industry group expecting an average of US$110 a barrel  for the year — and warned volatile political situations could push up prices.
       
    “The biggest and most immediate risk, however, is the crisis in the  eurozone. If it evolves into a banking crisis we could face a continent-wide  recession, dragging the rest of the world and our profits down,” he said.
     
    In a statement released as the AGM began Monday, IATA also downgraded its  outlook for European airlines in 2012, projecting losses of US$1.1 billion  compared with its previous forecast of US$600 million losses.
       
    “For European carriers, the business environment is deteriorating rapidly,  resulting in sizable losses,” Tyler was quoted as saying in the statement.
     
    But he added that the global picture was “diverse”, with carriers in North  and Latin America seeing improved prospects, compared with the negative picture  for airlines in Europe, Asia-Pacific and the Middle East. -- AFP
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