Report Shows Airlines are Rebounding

It's Up, Up and Away for the airline industry. Previously mired in the sunken economy of one of the world's worst financial crises, the airlines appear to be rebounding at a faster rate than had been predicted. That's great news for all of you timeshare vacationers!

The International Air Transport Association (IATA) has just released a report in which it expects airlines around the world to post a $2.5 billion profit in 2010, compared with its previous forecast in March for a loss of $2.8 billion. Passenger traffic is now expected to grow 7.1% this year compared with its previous forecasts for 5.6%.

More good news for those of you who will be flying to your timeshare vacation is that new capacity will be added to the global airline system as a result of the 1,340 new aircraft that are scheduled to join the global fleet in 2010. Of these, just 500 are replacement aircraft, while the rest will increase seating capacity.

Across the globe, airline industry highlights include the Asian economy (excluding Japan), which is expected to grow by 7% this year. China will outpace that with an expected 9.9% GDP expansion. As a result, the region’s carriers are expected to deliver the largest profit at $2.2 billion. This is more than double the previously forecast $900 million in March and a major reversal from the $2.7 billion loss in 2009.

North American air carriers are expected to return a profit of $1.9 billion. This is a major reversal from the previously forecast $1.8 billion loss, and the $2.7 billion that the region’s carriers lost in 2009.

Middle Eastern carriers are expected to post a profit of $100 million - their first since 2005. This is significantly better than the $600 million that the region’s carriers lost in 2009. And African carriers are expected to post a $100 million profit, their first since 2002. This reverses the $100 million loss previously forecast in March and the $100 million that the region lost in 2009.

'"Seeing black on the bottom line is a great achievement," commented Giovanni Bisignani, IATA’s director general and CEO. "The resilience of the industry has been strengthened by a decade of cost cutting, restructuring and re-engineering processes, with efficiencies in safety auditing, fuel management, infrastructure costs, and simplifying the business."

European airlines will continue to struggle, however. A stagnating economy, strikes, natural disasters, and a currency crisis are expected to result in an anticipated loss of $2.8 billion. The IATA report states that 70 % of the loss in revenue is a result of the volcanic ash crisis borne by the European carriers.
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