GENEVA, SWTIZERLAND – Air travel rose in August worldwide, show figures released this week by the airline industry body IATA, with growth for 2013 holding steady at 5 percent. The number of passengers worldwide is expected to top the 3 billion mark for the first time, this year.
Profits for airlines are better than in 2012, with the forecast at $11.7 billion: last year saw profits of $7.4 b. Next year should see strong growth, with profits expected to reach $16.4b.
IATA nevertheless revised its quarterly forrecast downwards, noting that “airline performance continued to improve in the second quarter; however at a slower pace than was expected with the previous projection (in June) of $12.7 billion. This reflects the impact on demand of the oil price spike associated with the Syrian crisis and disappointing growth in several key emerging markets.”
Expect the industry to grow in parallel to the economy.
“Airline profits generally follow broad economic trends. Business confidence bottomed out at the end of 2012 and we have been expecting an acceleration of economic activity to follow. That has not yet materialized. GDP growth in 2013 is now expected to be 2.0% which is slightly below the 2.2% recorded in 2012. Within that overall trend, we have seen an acceleration of improvements in developed markets (particularly the US) and a deceleration of growth in some key emerging markets (India, Brazil and to some extent China).”