Fifty per cent of airlines expecting profit decline

Around 50 per cent of the major airlines globally are anticipating profits to fall this year, according to a new report released by the International Air Transport Association (IATA).

The quarterly Airline Confidence Index issued by the IATA is based on a survey of the 230 carriers the association represents. It also suggests that demand for flights will remain stagnant or continue to weaken, with only about 25 per cent of the membership expecting any demand growth.

This represents a significant decline in optimism within the airline industry. Three months ago, when the last survey was carried out, 75 percent of the member airlines indicated that they anticipated a rise in passenger demand in 2009.

“Economic recession is quoted by many respondents as being a key driver of this change in the demand pattern,” a spokesman for the IATA said.

“Almost half the respondents now expect to see lower passenger volumes in the next 12 months with less than a quarter expecting an increase,” he noted.

Approximately 80 percent of the airlines reported a drop in profitability during the last quarter of 2008, and nearly 40 percent reported a decline in revenue.

Earlier this week, British Airways announced that it is anticipating losses totalling £150 million for this financial year.

Thanks to www.telegraph.co.uk for the above quotes, for more information on this article please visit their website.

www.iata.org