Airline losses

Airline industry reports massive losses

The airline industry lost US$1.53 billion in the first quarter, a reversal from a $17-million net profit reported a year ago, with carriers in Europe and Asia-Pacific performing far worse than those in other regions.

Bangkok Post,

6 June, 2012

The results from the International Air Transport Association (IATA) were based on January-March results from 55 airlines.

The most dramatic reversals were in the Asia-Pacific region, where airlines reported a combined loss of $231 million versus net earnings of $791 million in the same period last year. Carriers in Europe reported losses of $1.71 billion, compared with losses of $1.68 billion a year ago.

Airlines in three other geographical areas _ North America, Latin America and the Middle East _ were profitable in the first quarter.

North American airlines reported net earnings of $518 million, up from $5 million a year ago.

Middle East airlines, which have expanded aggressively and are seen as a threat by some carriers in other regions, posted a net profit of $195 million, down from $562 million in the same period last year.

IATA said higher fuel prices squeezed margins and noted that the first quarter is normally a weak time of year, but it said the evidence of deterioration is clear.

The Geneva- and Montreal-based group earlier this year said the airline industry's profits could fall by 62% this year, a bigger drop than predicted last December, due to rising fuel costs.

The industry's net profit may fall to $3 billion this year from $7.9 billion last year, with profit margins coming in at 0.5% of sales, IATA said in March.

IATA forecast last Dec 7 that global airline earnings this year will total $3.5 billion with a margin of 0.6%.