Although there was a strong industry performance in 2010, IATA has stated in its latest industry outlook note that growth will slow next year and this will be exacerbated by increasing capacity as airlines take delivery of new aircraft.
IATA figures expect the global airline industry to generate net profits of US$8.9 billion in 2010, up from its previous forecast of US$2.5 billion. Next year IATA forecasts profits to slip to US$5.3 billion.
“The cyclical upturn in traffic and yields has been faster than expected, reflecting the post recession rebound and tight capacity,” says IATA in its business outlook document. “However, the durability of this upturn is in increasing doubt in North America and Europe. Certainly the initial impetus from business inventory building and fiscal stimulus has ended, if not gone into reverse. Growth will slow in 2011. Unfortunately this is likely to coincide with increasing capacity, as new aircraft deliveries rise and fleet utilization recovers. Load factors and yields will come under downward pressure and we expect.”