Airlines Expected to Post $15B Profit This Year

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The International Air Transport Association (IATA) expects the airline industry to post a net profit of $15.1 billion for 2010, but director general Giovanni Bisignani says profit margins are still "pathetic" at 2.7%.
Back in September IATA forecast net profits of $8.9 billion, but increased their prediction due to "an exceptionally strong third quarter."

At a news conference in Geneva, Bisignani said developing markets such as China are "shifting the industry's center of gravity to the East," according to the Associated Press.

Based on its market value, Air China is now worth twice Delta or Germany's Lufthansa are worth, the IATA chief said.

European airlines continue to underperform other regions, he said.

IATA also revised its projections for 2011 to a net industry profit of $9.1 billion, up from the $5.3 billion forecasted in September.

But the profit margin picture will get even worse next year, weakening to 1.5%, IATA predicts.

"The industry is fragile and balancing on a knife edge," Bisignani says, and any shock could put an end to the recovery.


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