Page last updated at 11:27 GMT, Thursday, 11 March 2010

Airline industry recovering, says Iata trade body

Planes of various airlines at Heathow Airport
Iata says Asian carriers will lead the recovery

The global airline industry will recover strongly this year, as both passenger and freight numbers improve, the industry's trade body has said.

The International Air Transport Association said the sector would still make a loss, but predicted this would be half its estimate in December.

Iata now expects the world's airlines to make a combined loss of $2.8bn (£1.9bn) in 2010, rather than $5.6bn.

But it warned that European and US airlines were still suffering the most.

'Right direction'

Iata said it was "starting to see some blue skies ahead of us".

We are seeing a definite two-speed industry
Giovanni Bisignani, Iata director general

It expects to see global passenger numbers rise by 5.6% in 2010, after falling 2.9% last year.

At the same time, it predicts that cargo demand will rise by 10%, after last year's 11.1% decline.

"We are moving in the right direction," said Iata director general Giovanni Bisignani.

"The recovery is strong, but we are still at pre-crisis levels."

However, as the recovery in the airline sector continues, Mr Bisignani said European and US carriers were lagging behind Asian and Latin American airlines.

"We are seeing a definite two-speed industry," he said.

Iata expects European airlines to make a combined loss of $2.2bn this year, with US and Canadian airlines losing $1.8bn.

However, it said Asian-Pacific carriers could report profits totalling $900m, while Latin American airlines may make $800m.

Cost cutting

The Iata report came as German carrier Lufthansa said it intended to increase its operating profit in 2010 by cutting more costs.

Earlier this month, the airline said that it had made a net loss of 112m euros ($153m; £102m) in 2009. It has not given a net profit projection for 2010.

Lufthansa was recently hit by strike action by its pilots, while British Airways has been in talks with unions to avert a planned walkout by cabin crew members.

Both airlines are seeking to trim their workforces as they aim to turnaround their fortunes.

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