China's Airline Profitability Leads Globally This Year

After the financial crisis, the international aviation market, which had just shown signs of recovery, fell into a downturn again in 2011. Yesterday, the International Air Transport Association (hereinafter referred to as “IATA”) announced that in 2011, the global air transport industry received a profit of approximately 6.9 billion U.S. dollars, and its net profit margin was only 1.2%. What is even more worrying is that the outlook for the earnings of the industry in 2012 will be increasingly gloomy, and the net profit rate is likely to be only 0.6%. However, it is worth noting that in an ups and downs, China’s aviation industry has thrived and became the world’s most profitable flying company.

IATA pointed out that in 2011, the poor performance of air cargo dragged down the entire industry. By convention, every year from September to Christmas, it is the peak season for air cargo, but this year's market is particularly deserted, and the international air cargo market has seen volume and price declines. In addition, the high oil prices also squeezed a lot of profit from the airlines. According to the average price of US$112 per barrel of jet fuel, the fuel cost of the global aviation industry in 2011 will be as high as 178 billion US dollars, which is more than 2 billion US dollars more than previously expected.

However, several families are happy and happy. In 2011, the growth of airlines in the Asia Pacific region was particularly strong. Although the Japanese domestic market was still affected by the earthquake and tsunami in March this year, and the rate of shipment was sluggish, due to the fiery domestic market in China, both the shipping rate and profitability of the airline companies were significantly boosted. Because of the good development trend of China's aviation industry, IATA has even raised the profit forecast of airlines in the Asia-Pacific region to US$3.3 billion from the previous US$800 million, making this region undisputedly the most profitable region in the world.

After the bleak end of 2011, the aviation industry's profitability in 2012 was even less optimistic. “If the government cannot resolve the debt crisis in the euro area, uncertainties in the economic outlook will drag down the profitability prospects of the air transport industry next year. By then, the entire industry will suffer the most significant losses since the 2008 financial crisis, exceeding US$8 billion.” Airline Association President and CEO Tong Yanlin emphasized. IATA also pessimistically stated that even if the government intervenes, the European economy will inevitably undergo a temporary recession. Business confidence and consumer confidence index fell sharply.

The growth rate of global GDP in 2012 is expected to have dropped to 2.1%. According to historical experience, the aviation industry suffered a loss when the average growth rate of global GDP was less than 2%. Therefore, the outlook for the profitability of the global aviation industry in 2012 is bleak.

In fact, before this, American Airlines declared bankruptcy was once called the first leaf of aviation industry to fall in the fall. Then, there may be more shipping companies going bankrupt because they can't bear the cost pressure and the market downturn. The road to integration.

In addition, the difference in the profitability of the aviation industry in each region will be even more significant in 2012. Among them, European Airlines was affected by the worsening market economy in its host country and the further increase in passenger taxes and fees, with a loss of US$600 million, which was at the bottom of profit rankings. Asia Pacific airlines have the highest expected profit of US$2.1 billion.