Airlines' profits beat forecasts

The 2010 profit forecast for the world's airlines has been trebled, thanks to the stronger-than-expected rebounding of the global economy.

But next year is expected to be much weaker for the industry.

According to the International Air Transport Association, airlines are expected to post a net profit of $8.9-billion (R63.5-billion) this year, compared with a June projection of $2.5-billion.

The association, which represents about 230 airlines worldwide, revised its forecast upwards for a second time after predicting in March that airlines would lose $2.8-billion because the airline industry was among the hardest hit by the recession.

Association chief Giovanni Bisignani said in Singapore yesterday that the recovery had been much faster than forecast and the improved outlook was spurred by increasing demand and careful capacity management.

But for next year the association estimated airline profits would drop to $5.3-billion as stimulus packages ended and worldwide consumer spending slowed.

This year "is as good as it gets", said Bisignani.

The rebound from a loss of $9.9-billion in 2009 was driven by the Asia-Pacific market, especially China.

Europe was projected to be the only region to stay in the red.