IATA acknowledges two-speed industry recovery
GENEVA – The International Air Transport Association has blamed the restrictions placed on airlines to develop into global businesses for the patchy recovery of the industry across the globe.
“We are seeing a definite two-speed industry. Asia and Latin America are driving the recovery. The weakest international markets are North Atlantic and intra-Europe which have continuously contracted since mid-2008,†said Giovanni Bisignani, IATA’s director general and CEO.
IATA has halved its loss forecast for 2010 to US$2.8 billion (compared to the US$5.6 billion loss forecast in December 2009).
IATA said improvements are driven by economic recovery in the emerging markets of Asia-Pacific and Latin America whose carriers posted international passenger demand gains of 6.5 percent and 11 percent respectively in January.
North America and Europe are lagging with international passenger demand gains of 2.1 percent and 3.1 percent respectively for the same month.
IATA said premium travel, while slower to recover than economy travel, now appears to be following a cyclical recovery in volume terms.
But it is still 17 percent below the early 2008 peak. Premium yields, which are 20 percent below peak, may be suffering a structural shift, IATA said.
Asia-Pacific carriers will see the US$2.7 billion 2009 loss turn to US$900 million in profits on the back of a rapid economic recovery being driven by China
Bisignani added, “The stark contrast between profitability among Asian and Latin American carriers while losses continue to plague the rest of the industry clearly demonstrates the fact that airlines have not been able to develop into global businesses.
“The restrictions of the bilateral system prevent the kind of cross border consolidation that we have seen in industries such as pharmaceuticals or telecoms.
“Airlines are battling the challenges of the financial crisis without the benefit of this important tool. It’s time for change,†said Bisignani.
Ian Jarrett
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