Global airlines see $2.5 billion profit
BERLIN. June 8. KAZINFORM Global airlines banished two years of economic misery with an abrupt turnaround in industry forecasts on Monday, though they were laced with a strong note of caution on Europe's carriers; Kazinform refers to The Arab News.
European markets fell sharply and the euro hit multi-year lows as a renewed crisis of confidence in government debt and the health of the U.S. economy showed the recovery the industry is counting on is still fragile.
The International Air Transport Association said it now expects global airlines to report a $2.5 billion profit this year, an improvement of more than $5 billion from its forecast of a loss just three months ago.
IATA Chief Executive Giovanni Bisignani said the global economy was improving more quickly than anyone expected, boosting traffic and yields sharply - something unthinkable even two months ago during Europe's volcanic ash crisis.
But Europe, mired in bad debts and bad feelings from flight cancellations during the ash crisis, is expected to lag - particularly if a summer of strikes paralyzes air travel.
"We have a currency problem, we have the volcano that struck in April ... and we have some tension with labor unions, so those three aspects are making the difference," Bisignani told Reuters Insider TV on the sidelines of the AGM.
IATA most recently predicted worldwide industry losses of $2.8 billion in 2010, as airlines cut prices to fill seats. It said on Monday that Europe is still expected to lose that amount this year, almost 30 percent more than its forecast in March.
The forecast is expected to be the highlight of the opening of IATA's meeting and comments by executives bore that out; Kazinform cites The Arab News.
See www.arabnews.com for full version