The world's airlines posted a cumulative second-quarter net profit of $2.32 billion, down 40% from $3.71 billion in the year-ago period, IATA reported.
The world's airlines posted a cumulative second-quarter net profit of $2.32 billion, down 40% from $3.71 billion in the year-ago period, IATA reported. For the first time in eight quarters, airline profits declined, with the exception of Europe, IATA said in its latest Airlines Financial Monitor released Wednesday.
Global operating profit for the second quarter ended June 30 was $3.94 billion, down 43% from $6.95 billion in the year-ago quarter, according to the report.
IATA last month predicted sluggish growth and weak profits in 2012. IATA DG and CEO Tony Tyler said that airline industry net profits should total $6.9 billion in 2011 on revenue of $594 billion, up from the previous projection of $4 billion, but well down on the $16 billion achieved in 2010 (ATW Daily News, Sept. 21).
For the second quarter, IATA said Asia/Pacific airlines posted the largest decline with a net profit of $648 million, down 56% from $1.49 billion, hardest hit by cargo weakness. By contrast, profits improved to $1.12 billion for the European airlines, up 9.4% from $1.02 billion year-over year, IATA reported.
Load factors slipped in August on most markets in the face of weaker demand, said IATA, but passenger load factors were still close to the highs of 2010. “The slippage in August and declining twin-aisle aircraft utilization suggests the challenges of maintaining favorable supply-demand conditions are growing,” IATA said.
The organization said freight markets “are increasingly challenging with falling yields and still high fuel costs increasing break-even load factors.” IATA noted the situation is better in passenger markets. “US airlines in particular have been able to raise passenger yields on international markets by around 9% so far this year,” IATA stated in the report.