Airlines worldwide will make profits of $2.5bn in 2010, an industry body has said. The prediction marks a huge upturn from the last forecast of the International Air Transport Association (Iata). In March, the airline association had predicted global losses for airline businesses of $2.8bn. "The global economy is recovering... much more quickly than could have been anticipated," said Iata director Giovanni Bisignani. "We thought that it would take at least three years to recover the $81 billion (14.3%) drop in revenues in 2009," he added. "But the $62bn top-line improvement this year puts us about 75% on the way to pre-crisis levels."
The bulk of the revenue turnaround is predicted to come from Asia (excluding Japan), where Iata predicts 2010 GDP growth of 7%. Meanwhile, the Iata report actually revised down its 2010 forecast profits for European carriers to a loss of $2.8bn, from $2.2bn. The poor performance in Europe is mainly due to slow growth, although Iata says the Icelandic volcanic ash cloud has also cost airlines some $1.8bn in lost revenues. The airline industry body is surprisingly confident in its forecast for robust revenue growth, given growing market fears of a double-dip recesssion in the second half of the year. Instead, Iata sees the biggest risk to its forecast as a possible rise in the cost of fuel.