IATA Reduces Forecasts for the 2012 Aviation

IATA- International Air Transport Association- recently announced downgrade news in industry outlook, for the current year 2012

This decision is mainly because of the recent increase in the oil prices. This year, IATA expects a profit of around $3 billion at a 0.5 percent range. Previously, the oil price per barrel was around $99, and the new price is $115 per barrel. Therefore, a downgrade of $500 billion has primarily driven by an increase.

Some of the important factors have prevented the significant downgrade and they are as follows:

  • US economy improvement
  • Stabilized cargo market
  • Slower capacity expansion
  • Eurozone crisis
The IATA Director General, Tony Tyler has announced that 2012 is going to be a challenging year for the airlines. The risk of Eurozone crisis replaces an equal risk of oil price rise. This has already damaged the industry profit and also the global GDP growth. Tyler also added that the GDP growth impact would continue to push the industry challenging for the current year.

IATA expected around 7$ billion as profit during the year 2011, which is a better performance for the Chinese carriers.

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