Airlines doing well but mkts paint a gloomy picture: IATA

Profitability of airlines across the world reflected a "reasonable" performance in the third quarter of this year, but the picture was gloomy for them in share markets, global airlines body IATA said today.

"In fact during Q3, airlines did quite well, with a sample of 60 airlines reporting net profits of USD five billion," the October-November Financial Monitor of the International Air Transport Association (IATA) said.
However, the net profits of these sample airlines, especially those in Asia-Pacific region and North America, were down by over half compared with the 2010 figures in the same period.
On a depressing note, the latest IATA study said airline share prices were down 40% so far this year and fell by 14% last month alone.
"That is not too far away from the lows of early 2009, in the depths of the 'great recession'", the report said, adding air carriers in all regions were affected.
"In the worsening economic environment, investors expect airline profits to be hit more than most sectors," the IATA said.
While 22 Asia-Pacific airlines saw net post-tax profits fall from USD 3495 million to USD 1596 million, 12 North American carriers reported a decline of their net profits to USD 898 million from USD 2409 million posted in Q3 last year.
Interestingly, airlines in Europe, which is facing a dire economic outlook, saw net profits declining by a much lesser amount -- from USD 2867 million to USD 2744 million.
A "clear decline" was witnessed in the air freight markets as business confidence declined, but air travel was still trending higher, the IATA study said.