07.04.08
The International Air Transport Association (IATA) has cut its airline industry profit expectations for 2008 for the second time in 4 months, amid surging oil prices and slowing economy. IATA lowered its 2008 profit outlook for the industry to $4.5bn from its September 2007 forecast that called for $7.8bn profit for this year.
The initial impact of the credit crunch saw the $7.8bn forecast lowered to $5.0bn in December. The revised estimate of $4.5bn is are based on global economic growth slowing to 2.6% and an average annualized oil price of $86 per barrel.
Commenting on the revised guidance, Giovanni Bisignani, IATA's Director General and CEO, ‘We still expect a positive bottom line of $4.5bn, but it's turning out to be a very tough year. The broadening impact of the global credit crunch has brought buoyant consumer confidence to an abrupt end. Oil prices continue to rise. Demand is softening and after the 64% improvement in labour productivity and an 18% reduction in non-fuel unit cost attained since 2001, efficiency gains are much more difficult to achieve.’
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