Tony Tyler, director general and chief executive of the International Air Transport Association (IATA) has warned the airline industry of tough times ahead and described the slowdown in the European and US economies as “frightening”. IATA has predicted a 29% drop in airline profits for 2012, impacted by the slowing economies as well as the EU Emissions Trading Scheme. Profits margins are expected to be a marginal 0.8%, said IATA.
Although the US and European economies have not yet slipped back into recession, growth remains below 2% – the level where airlines have historically begun to lose money.
IATA forecasts industry profits in 2012 will fall 29% to $4.9 billion from $6.9 billion this year.