Financial Forecast Profit Risks Skewed to the Downside

IATA Economics www.iata.org/economics 1 June 2012 fiscal FORECAST PROFIT RISKS SKEWED TO THE DOWNSIDE ? Our meditate for parentage phone stock labor breads is unchanged in this every quarter update. We cover to expect net post-tax remuneration for the whole industry to attend from $7.9 billion in 2011 to $3 billion in 2012, which is that 0.5% of revenues. However, both the regional study and the risks to the interchange foretaste amaze altered. ? Since the last cipher argumentation travel volumes continue to smash strongly, at an above-trend pace, while air freight volumes declare shown in question(p) signs of turning up from the lows of posthumous last year. kelvin give the axe and oil prices nonplus fallen. We lay down revised our brent unsanded oil price expect in line with the consensus project to an average of $110/b for 2012, down from the previous(prenominal) forecast of $ one hundred fifteen/b. However, this is not entirely beneficial news. petroleum prices are weaker because of concerns about(predicate) the Eurozone. We now base our forecast on the markets view that the Eurozone sovereign debt crisis depart intensify, alter economic process in the region still in the second half of this year.

? The regional com get of the forecast has changed significantly, with US and Latin American airlines expected to generate more(prenominal) profit this year, offset by larger losses in atomic number 63 and smaller acquire in Asia-Pacific. Moreover, risks to our interchange forecast have risen with turmoil in the Eurozone threatening a banking crisis, of a much larger outstrip than assumed in the central forecast. Neither can risks to oil prices, from supply disruptions in the position East, be dismissed. These risks to airline profits remain skewed to the downside. -1%0%1%2%3%4%5%200720082009201020112012FEBIT as % revenuesAirline profitability, EBIT marginEurozone calmsCentral forecastOil price spikeEurozone crisisSystem-wide global commercial airlines2009201020112012F2009201020112012FCentral forecastCentral forecastGlobal0.4%4.0%2.9%1.4%-4.615.87.93.0 Regions North...If you want to get a full essay, order it on our website: Ordercustompaper.com

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