After an almost two-year financial nose dive, the global airline industry appears ready to soar again.
Three months after forecasting $2.8 billion in worldwide losses, a trade group for the world's airlines now predicts $2.5 billion in profits for 2010, with air travel demand and cargo traffic expected to grow faster than previously predicted.
A report released Monday by the Montreal-based International Air Transport Assn. said passenger traffic worldwide is expected to grow 7.1% in 2010 over the previous year while cargo traffic will expand 18.5%. In March, the group estimated growth of 5.6% for passenger traffic and 12% for cargo.
But the recovery won't benefit all carriers equally.
Airlines in Asia and North America will generate significant profits, thanks to increasing demand and improving economies, according to the forecast.
By contrast, the forecast predicts that European airlines will be in the red in 2010 with $2.8 billion in losses because of a weak economy; uncertainty over volcanic activity in Iceland, which temporarily grounded all flights in Europe; and more airline labor unrest. The union representing British Airways cabin crews has recently organized strikes as part of an ongoing dispute over pay and changes in work practices.
The trade group noted that the improved results projected for 2010 still won't raise revenues to 2008 levels, before the start of the economic slump.