Latest IATA data showed on Wednesday 55 world airlines posting a combined loss of $1.5 billion, and overall global profits in the first quarter of 2012 falling significantly. The Middle East carriers were the only ones to post a 15.2% growth with a 4.5% increase in demand. In stark contrast, European carriers suffered maximum net losses followed by those in the Asia-Pacific region.
The most-profitable airlines were in North America, followed by those in Latin America and the Middle East.
Load factors for the Middle Eastern airlines at 74%, the second-weakest among regions, but were 0.4% higher than April.
IATA report said Middle Eastern carriers posted a 12.4% increase in demand, despite registering a 11.7% rise in capacity. The outstanding performance by the Middle Eastern airlines helped them capture half of this year’s growth in cargo markets as well.
European and Asia-Pacific airlines, on the other hand, recorded a post-tax net loss of at least $1710 million and $231 million respectively, the figures showed.
“Q1 airline profit fell significantly compared to a year ago. Although the industry struggled, with 55 airlines indicating a combined net loss of USD 1.5 billion, North American airlines performed strongly,” the IATA report said.
The IATA, however, said that market conditions during Q2 have been supportive for airline profits, with oil prices falling further in June.
“The airline industry is fragile. Relief in oil prices provides some good news. Unfortunately, the softness in oil markets comes on the back of fears of deterioration in the European economy,” Tony Tyler, IATA’s director general and CEO, said.
“Business and consumer confidence are falling. And we are seeing the first signs of that in slowing demand and softer load factors. This does not bode well for industry profitability. Airlines are expected to return a $3vn profit in 2012 on $631bn in revenues. That’s a razor-thin 0.5% margin.”