Originally Posted by
DAL 88 Driver
So, a year ago when Delta's profitability was still questionable... yes. Now that Delta is posting record profits... "long shot." Okay, got it.
http://www.iata.org/whatwedo/Documen...ook-Sep-10.pdf
STRONG UPCYCLE IN 2010 BUT WEAKER 2011
After a strong first half performance, in both air transport markets and airline cash flows, we are now expecting the airline industry worldwide to generate net profits of US$8.9 billion in 2010, up from our previous forecast of US$2.5 billion. The cyclical upturn in traffic and yields has been faster than expected, reflecting the post recession rebound and tight capacity. However, the durability of this upturn is in increasing doubt in North America and Europe. Certainly the initial impetus from business inventory building and fiscal stimulus has ended, if not gone into reverse. Growth will slow in 2011. Unfortunately this is likely to coincide with increasing capacity, as new aircraft deliveries rise and fleet utilization recovers. Load factors and yields will come under downward pressure and we expect profits to slip to US$5.3 billion
BUSINESS CONFIDENCE STRONG BUT FALLING
Strong business confidence, driven by a recovery in world trade and corporate profits, has also been a major driver of air travel markets. The sharp rebound in the number of passengers traveling on premium seats – critical for the profitability of long-haul network airlines – has been driven by business travel. Measures of business confidence are good leading indicators for changes in this travel segment. Confidence among business is still high but is falling. Air travel volume growth rates are certainly set to slow down significantly during the rest of this year, as business travel growth slows. However, so far, the outlook appears to be for a phase of slower growth rather than an absolute decline.