Money Matters - Simplified

International Air Transport Association

Airline profits expected to fall as fuel costs surge

Natural catastrophe in Japan, political unrest in the Middle East and North Africa and spiraling rise in oil prices were cited as the main reasons behind the International Air Transport Association (IATA) warning that airline industry profits will dip in 2011.

Airlines say losses look worse

Paris -- A leading airline association in Paris said airline losses in 2009 would reach $11 billion with customer demand for flights slack.

The International Air Transport Association, which represents 230 airlines, increased the loss forecast from June by $2 billion and said airlines would not quite pull out of their tailspin in 2010 although losses would improve next year to $3.8 billion.

As airlines continue to adjust to the global recession with reduced flight schedules, industry revenues are expected to drop 15 percent to $455 billion this year, The New York Times reported Tuesday.