Airlines worldwide may post a profit of US$3.8 billion in 2007, 52 percent more than an earlier forecast, as higher passenger numbers help offset extra fuel costs and a slowdown in the United States, a trade group said yesterday.
The new forecast exceeds the December projection for a US$2.5 billion profit. Net income is set to double to US$7.6 billion in 2008, as growth in the United States picks up and fuel prices decline, said the Geneva- and Montreal-based International Air Transport Association, which represents 250 carriers including American Airlines and Air France-KLM Group.
"Looking into 2008, for the first time, we anticipate faster growth in the US and slightly lower oil prices," IATA said in a statement. "Net profits could rise to $7.6 billion with operating margins up to 4 percent."
The world's carriers are on course to regain profitability in 2007, ending six consecutive years of losses in the US$450 billion industry, as economic growth prompts more people to travel by air. The group's members as a whole haven't been profitable since 2000, when they earned US$3.7 billion, Bloomberg News said.
Airlines worldwide have racked up losses of US$41 billion since the September 11, 2001, terror attacks, which discouraged air travel. Demand since then has been hurt by the war in Iraq, the outbreak of severe acute respiratory syndrome in 2003 and surging oil prices.
Global passenger traffic, measured as the number of passengers multiplied by the distance flown, will increase 5 percent this year and cargo traffic will rise about 4.3 percent, Giovanni Bisignani, director-general of the group, said in Paris last month.
In the United States, carriers are forecast to post a loss of US$600 million amid higher spending to restructure their businesses.
IATA boosted its estimate for spending to US$9 billion from US$6 billion previously.
European airlines will post a US$2.4 billion profit in 2007, while those in the Asia Pacific region will record income of US$1.7 billion. That compares with December forecasts for profit of US$1.5 billion and US$1.2 billion respectively.