Geneva, December, 14 2010 -- Powered by emerging economies like China and India, carriers in the Asia-Pacific region will post highest profit ever of USD 7.7 billion in 2010, overtaking airlines in North America and Europe, world aviation industry body IATA said today.

Releasing the revised outlook for the year, IATA pegged overall net profits for the industry at USD 15.1 billion, up from USD 8.9 billion three months ago, on account of rise in business class travel, expansion of economies in the Asia- Pacific region and emergence of vast middle class, besides a post-recession rebound.

"Asia-Pacific carriers will post the largest profit in 2010 at USD 7.7 billion. It remains the most profitable region in the world for airlines based on strong GDP growth (outside of Japan) of 6.6 per cent led by China," IATA Director General and CEO Giovanni Bisignani said.

He said the 6.9 per cent demand growth for 2011 is above the global average, but below the expected capacity expansion of 7.8 per cent.

Bisignani said that while North American carriers will register profits of USD 5.1 billion in 2010, the figure will decrease to USD 3.2 billion in 2011.

The weak US economic recovery will limit demand increases to 3.7 per cent, much below the global average of 5.3 per cent while capacity will rise by 4.6 per cent, driving the decrease in profitability.

Likewise, the Middle East carriers are expected to see their profits of USD 700 million shrink to USD 400 millions in 2011.

Bisignani said although the Middle East will grow fast in both 2010 and 2011, the pace of demand growth will halve from 21.5 per cent in 2010 to 10.5 per cent in 2011.

The European carriers will be the industry laggards among major regions, with a USD 400 million profit in 2010 shrinking to USD 100 million in 2011.

"Intra-European market conditions remain depressed as a result of debt-crisis, slow economic growth, government austerity measures and increasing taxation," Bisignani said.

He said the IATA has also revised upwards its projections for 2011 to a net industry profit of USD 9.1 billion (up from USD 5.3 billion forecast in September). MORE SK SA SA 12141932

(THROUGH ASIA PULSE)

14-12 2010