Beijing: Airline industry group IATA warned on Monday global profits would more than halve this year owing to surging oil prices and the eurozone crisis, with European carriers suffering losses of $1.1 billion.
The head of International Air Transport Association, Tony Tyler, also hit out at a controversial carbon tax scheme put in place by the European Union, lashing it as a “polarising obstacle to real progress”. Tyler told the group’s annual general meeting in Beijing that “2012 is another challenging year. We expect revenues of $631 billion but a profit of just $3.0 billion”.
That compares with a profit of $7.9 billion in 2011.Tyler cited cost of oil as one of the main reasons for “anaemic global profitability” — with the industry group expecting an average of $110 a barrel this year — and warned volatile political situations could push up prices. But he added, “The biggest and most immediate risk … is the crisis in the eurozone. If it evolves into a banking crisis we could face a continent-wide recession, dragging our profits.”
In a statement released as the AGM began Monday, IATA said it had downgraded its outlook for European airlines in 2012, projecting losses of $1.1 billion compared with its previous forecast of $600 million.