Global airlines cut their 2013 industry profit forecast by 8 percent to $11.7 billion on Monday, citing weaker growth in parts of Asia and a worsening slowdown in freight demand.
The International Air Transport Association, which represents some 200 carriers, said the $1 billion downgrade from its previous forecast for the whole industry in June also reflected a spike in oil prices driven by the Syrian crisis.
‘The industry situation is not improving as quickly as we had expected,’ IATA Director General Tony Tyler said.
‘I should stress that this is still an improvement over the 2012 profit of $7.4 billion.’
For 2014, IATA predicted a rebound in profits to $16.4 billion on hopes of rising business and consumer confidence and a respite in oil prices. However, its chief economist warned any prolonged spike in fuel costs could upset this scenario.
‘Emerging market growth in India, Brazil and to a certain extent China has been slower than anticipated,’ Tyler told reporters on a conference call.
‘This has been somewhat balanced by improvements in the U.S. economy as well as a stabilization in the euro zone.’
IATA raised its forecasts slightly for North American and European airlines as U.S. carriers consolidate and cut capacity, and Europe’s financial crisis shows signs of easing.