IATA Increases Net Profit Outlook for Airlines in FY11, Slashes Cargo Expectations
Tweet
Share
E-mailGet Alerts UAL Hot Sheet
Price: $113.16 +1.30%
Rating Summary:
27 Buy, 8 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
27 Buy, 8 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Join SI Premium – FREE
Expectations for airlines have been raised Tuesday.
The International Air Transport Association (IATA) increased its net profit outlook for airlines in 2011 by about 72.5 percent, from $4 billion to $6.9 billion. IATA cites increasing passenger demand on the raised outlook.
The number is still about 57 percent lower than $16 billion of net profits realized in 2010. Revenue expectations increased slightly as well, up about 1.5 percent to $464 billion.
IATA's passenger growth outlook has been raised as well, from 4.4 percent in June to 5.9 percent -- about 2.8 billion passengers -- as of this latest report.
Breaking the outlook down by region, the IATA sees North American companies profiting $1.5 billion, European carriers netting $1.4 billion, and Asian airlines recording $2.5 billion in net profit.
Despite the profit growth, IATA slashed it's cargo growth forecast from 5.5 percent to 1.4 percent, saying air freight has stagnated since the start of the year.
From the IATA: "Airlines are going to make a little more money in 2011 than we thought. That is good news. Given the strong headwinds of high oil prices and economic uncertainty, remaining in the black is a great achievement,” said Tony Tyler, IATA’s Director General and CEO. “But we should keep the improvement in perspective. The $2.9 billion bottom line improvement is equal to about a half a percent of revenue. And the margin is a paltry 1.2 percent. Airlines are competing in a very tough environment. And 2012 will be even more difficult."
Amid the good news for 2011, IATA has more caution heading into 2012. The association sees profits falling to $4.9 billion next year, on revenue of $632 billion. Passenger growth is expected to be 4.6 percent with cargo volumes down 4.2 percent.
On the report this morning, airlines are looking slightly stronger. Key stocks to watch include:
The International Air Transport Association (IATA) increased its net profit outlook for airlines in 2011 by about 72.5 percent, from $4 billion to $6.9 billion. IATA cites increasing passenger demand on the raised outlook.
The number is still about 57 percent lower than $16 billion of net profits realized in 2010. Revenue expectations increased slightly as well, up about 1.5 percent to $464 billion.
IATA's passenger growth outlook has been raised as well, from 4.4 percent in June to 5.9 percent -- about 2.8 billion passengers -- as of this latest report.
Breaking the outlook down by region, the IATA sees North American companies profiting $1.5 billion, European carriers netting $1.4 billion, and Asian airlines recording $2.5 billion in net profit.
Despite the profit growth, IATA slashed it's cargo growth forecast from 5.5 percent to 1.4 percent, saying air freight has stagnated since the start of the year.
From the IATA: "Airlines are going to make a little more money in 2011 than we thought. That is good news. Given the strong headwinds of high oil prices and economic uncertainty, remaining in the black is a great achievement,” said Tony Tyler, IATA’s Director General and CEO. “But we should keep the improvement in perspective. The $2.9 billion bottom line improvement is equal to about a half a percent of revenue. And the margin is a paltry 1.2 percent. Airlines are competing in a very tough environment. And 2012 will be even more difficult."
Amid the good news for 2011, IATA has more caution heading into 2012. The association sees profits falling to $4.9 billion next year, on revenue of $632 billion. Passenger growth is expected to be 4.6 percent with cargo volumes down 4.2 percent.
On the report this morning, airlines are looking slightly stronger. Key stocks to watch include:
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Advance Auto Parts (AAP) PT Lowered to $48 at DA Davidson Following 25% Selloff Post Q2 Results
- DA Davidson Starts Comfort Systems USA (FIX) at Buy
- Albemarle names Max Hood as chief accounting officer
Create E-mail Alert Related Categories
Analyst Comments, Corporate NewsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
