IATA slashes industry profit forecast

The International Air Transport Association (IATA) lowered its forecast for industry profits in 2008, on weaker economic outlook and higher fuel prices. 

In a statement, IATA said economic volatility is having a more immediate effect on international air freight demand. It grew 3.6% in October from a year ago, but slipped from the 5% on-year growth recorded in September. 

In Asia, airlines saw a fall in growth rates from 7% in September to 5.8% in October, partly due to slower growth in semiconductor shipments, IATA said.

"Air cargo is still expanding, but the industry has shifted gears to a slower pace of growth. Passenger demand remains strong, but this is a cyclical industry. The next months will be critical to see if the impact of the credit crunch spreads from cargo to corporate and leisure travel."

"At the same time as the credit crunch casts a shadow over global economic performance, strikes from France to Japan in the last month are reminders of the need to keep labour on board with efficiency.  Airlines are still on track to show their first profit since 2001 this year. That's good news. But with US$200 billion of debt and oil soaring to record levels, it's no time to loosen the belt or the purse strings. Cost control is more critical than ever in all corners of the business," said Bisignani.