However, the anticipated 2010 profit of $2.5 billion is
only a 0.5 percent return on revenues, showing the fragile financial situation
of the industry. IATA statistics show that the region's carriers have managed
to increase demand at even higher levels of 16.8 percent in July and 19.4
percent over the first seven months of the year. Load factors and financial
performance will record improvements this year.
Overall, the passenger and cargo traffic demand continue
to show upward trends in the month of July 2010.
"It is clear that the recovery has entered a slower
phase. During the second half of 2009, demand was rebounding at an annualized
rate of 12 percent for passenger and 28 percent for cargo. In the year to July,
the annualized growth rates had dropped to 8 percent for passenger and 17
percent for airfreight. However, this is still considerably above the
industry's traditional 6 percent growth trend," IATA said in a statement .
"The recovery in demand has been faster than
anticipated. But, as we look toward the end of the year, the pace of the
recovery will likely slow. The jobless economic recovery is keeping consumer
confidence fragile, particularly in North America and Europe. This is affecting
leisure markets and cargo traffic. Following the boost of cargo demand from
inventory re-stocking, further growth will be largely determined by consumer
spending which remains weak," said Giovanni Bisignani, IATA's director
general and CEO.
"Costs are a critical element. This year has been
marked by strikes and threats of strikes at airlines, and with airports and air
navigation service providers. Avoiding strikes at BAA and AENA, Spain's
provider of air navigation services, were major accomplishments. We are all in
this together-including all our partners in the value chain and those who work
in this financially fragile industry. It is not the time for strikes. We must
work together to secure our future by finding solutions to reduce costs,"
said the director.
He also said the need for a regulatory structure that
facilitates consolidation across political borders. "The crisis has seen
consolidation in Europe and the US. This month's merger announcement by LAN and
TAM brings Latin America into the picture. But we remain an industry of over a
thousand players with only very limited opportunities to consolidate as a result
of the antiquated bilateral system's restrictions on ownership. The business
realities of the industry are changing. It is critical that governments find a
modern regulatory structure that is free of outdated ownership restrictions and
able to facilitate opportunities for consolidation globally-something that
other industries take for granted," said Bisignani.