Sign up | Log in



Home  >>   Daily News  >>   Asean News  >>   Aviation  >>   Airlines face difficult year
NEWS UPDATES Asean Affairs        7  June 2011

Airlines face difficult year

Related Stories

June 6, 2011
THAI Airways takes first privatization steps

May 21, 2011
THAI Airways to launch budget line

March 18, 2011
THAI cuts local fares

March 4, 2011
Slim-down rule for THAI attendants

March 1,2011
Thai Air moves on Thai Tiger deal

February 26, 2011
THAI profits soar but fuel a worry

February 10, 2011
Thai AirAsia to list

February 1, 2011
Delays do not trouble Thai airline

January 15, 2011
Thai Airways to pay bonus

Global airlines' profits are deteriorating as they struggle with high fuel prices, unrest in the Middle East and North Africa and the aftermath of the March disaster in Japan.

The International Air Transport Association (IATA) yesterday reduced its 2011 industry profit forecast by 54 percent to US$4 billion from $8.6 billion in March.

Given projected revenues of $598 billion this year, the $4-billion profit forecast represents a 0.7 percent margin.

"That we are making any money at all in a year with this combination of unprecedented shocks is a result of a very fragile balance," director-general Giovanni Bisignani told the group's 67th annual meeting yesterday.

Fuel is the main cause of the reduced profitability, he pointed out. IATA expects Brent crude to average $110 a barrel this year, up from an earlier forecast of $96.

For each dollar increase in the oil price, airlines face an additional $1.6 billion in annual costs. With half of its fuel requirements hedged at 2010 prices, the industry's 2011 fuel bills will rise by $10 billion to $176 billion. Fuel comprises 30 percent of airline costs, more than double the 13% of 2001, he said.

Despite high energy prices, world trade and corporate earnings continued to improve. As a result, IATA forecasts global GDP will expand this year by 3.2 percent, which is supporting continued growth in demand for air transport, according to the IATA chief.

However, IATA has cut its growth forecasts because of higher fuel costs. Passenger demand is expected to grow 4.4 percent this year, below the 5.6 percent forecast in March. Cargo demand is expected to rise 5.5 percent, not 6.1 percent as predicted earlier.

The number of price-sensitive leisure travellers has fallen 3-4 percent over the past five months, reflecting higher fuel prices and, in Europe, new passenger taxes. Less price-sensitive premium travel has been better, driven by growing trade and investment. Premium passenger growth has dipped from 9 percent last year but is expected to be close to the historical trend this year at 5-6.

In Asia-Pacific, IATA has cut its profit forecast to $2.1 billion from $3.7 billion - and from actual profits of $10 billion last year - though airlines in the region remain the most profitable worldwide.

Airlines in this region are more exposed than others to cargo markets and fuel price fluctuations.

Asia-Pacific airlines carry 40 percent of all air freight, while low labour costs and relatively low hedging mean fuel accounts for a bigger proportion of total costs.

In addition, the impact on travel of Japanese earthquakes and tsunami are expected to dent the region's prospects for the remainder of the year.

However, strength in China and India means Asia-Pacific is the only region where demand increases (6.4 percent) are expected to outpace capacity growth (5.9 percent).

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below




1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Today's  Stories    7  June  2011 Subsribe Now !
• Airlines face difficult year Subcribe: Asean Affairs Global Magazine
• Foreign firms don't support Yudhoyono "renegotiations" Asean Affairs Premium
• Export increase shows Indo FTAs working
Research Reports
on Thailand 2007-2008

•Textiles and Garments Industry

•Coffee industry

•Leather and footwear industry

•Shrimp industry

• Petronas: oil in $75-$80 range     
• Singapore reviewing foreign maids exam

• Tata Motors backs Thai tax reform

• Bangkok is top Asian tourist draw

• Foreign trade deficits in Vietnam

Asean Analysis    June  2011

Advertise Your Brand
• Philippines finds success in outsourcing Sponsor Our Events

Asean Stock Watch    June  2011 

• Asean Stock Watch-June 7 p

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent

• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore
• Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline
• Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

| Terms of Use | Site Map | Privacy Policy  | DISCLAIMER |

Version 5.0
Copyright © 2006-2021 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand