Airlines Will be Profitable in 2007

Although up is better than down, IATA’s director general and CEO, Giovanni Bisignani, points out in his forecast that, “an industry profit of $2.5 billion is peanuts. It is a margin of 0.5% on $450 billion of revenues. Or a 2.2% EBIT.”

When compared to an expected loss of $500 million when final figures are in for 2006, the projections for next year are good news. Regional numbers for airlines in 2006 are expected to show Europe with the biggest profits, at $1.5 billion. The only region expected to lose money is Africa, which is expected to show a deficit of $500 million. As for the rest, Asia will be up $1.2 billion, the U.S. up $200 million and the Middle East and Africa with profits of $100 million. All of these figures include both passenger and cargo revenues.

Looking ahead to cargo matters in the new year, IATA is supporting five pilot projects that will test standards, process and technical solutions for E-freight. The aim is to eliminate 38 documents involved in the process. Test sites are Canada, Hong Kong, the Netherlands, Singapore and the U.K. Target date for successful completion is 2010 for countries with the correct legal and regulatory framework, according to the Association.

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