Airlines in Europe are expected to break even at best, according to new forecasts from airline body IATA. The body says that airlines in North America, by contrast, are expected to make combined profits of $3.4 billion and those in Asia Pacific, $3.2 billion. Globally, airlines are predicted to make profits of $8.4 billion.
In its December Industry Outlook, IATA says, “US airlines continue to improve their profitability and we have raised forecasts this year and next. Performance in Asia-Pacific is mixed but overall profitability has not deteriorated as much as we had expected, despite the weakness of cargo markets. Even in Europe, where home markets have been damaged by the Euro-zone crisis, performance has improved and we now expect the region to break even.”
The organisation says that fuel costs are expected to account for 33% of operating expenses in 2013.
It says, “Jet fuel prices have fluctuated not far from an average of $130 a barrel for the past two years. This sideways move is due, in the most part, to a balance between expectations of increased supply from new oil in the US and increased Saudi Arabian supply, versus expectations of continued moderate growth in demand supported by loose monetary policy.”To receive our free weekly round-up of all news stories from our site, click here
Filed Under: News