Airline profit forecast revised down

The International Air Transport Association (Iata) has cut its forecast for airline profits in 2012. The organisation this week said the sharp rise in oil and fuel prices since the December forecast had led to the downgrade of its forecast for net profits this year from $3.5 billion to $3 billion.
“The downgrade would have been larger but macro-economic conditions appear to have improved,” reads a statement. “The major risk we feared in December, of a significant worsening in the Eurozone crisis, appears to have been averted for a while, with the provision of liquidity by the European Central Bank and a second bailout for Greece. The US economy and the confidence of the US consumer also have improved.”
According to Iata this has limited the downside for growth in air travel and cargo. Support for profitability this year has also come from slower growth in capacity, based on announced schedules, than was previously expected.
“We now expect load factors to marginally improve this year, rather than decline, supporting both yields and unit revenues.”