iata industry outlook presentation december 2011
DESCRIPTION
IATA outlookTRANSCRIPT
To represent, lead and serve the airline industry
The outlook for air transport markets and the industryDecember 2011www.iata.org/economics
Airline cash flows down by Q3 but not bad
-5
0
5
10
15
20
2006 2007 2008 2009 2010 2011
% re
venu
es
EBITDA as % revenues, seasonally adjusted
Source: Bloomberg
US airlines
Q3
Asia-Pacific airlines
European airlines
Asset utilization underpinned profitabilityPassenger load factor and aircraft utilization, seasonally adjusted
Source: IATA
73%
74%
75%
76%
77%
78%
79%
80%
7.67.77.87.98.08.18.28.38.48.58.6
2007 2008 2009 2010 2011
Single aisle aircraft utilization
Passenger load factor
Ave
rage
dai
ly h
ours
flow
n
% A
SKs
Fall of cargo: utilization hard to sustain
11
12
13
14
15
16
17
270
290
310
330
350
370
390
410
430
450
2007 2008 2009 2010 2011
FTK
s pe
r mon
th, b
illio
n
RPK
s pe
r mon
th, b
illio
n
Total air travel and air freight volumes, seasonally adjusted
FTKs
RPKs
Source: IATA
Fragile EU foundation to air travel strengthSegment flow data, % growth year to September
-15%
-10%
-5%
0%
5%
10%
15%
TransAtlantic Within Europe Europe-Asia TransPacific Within Asia
Freight Passengers
Sources: IATA
International trade has stopped growing
-25
-20
-15
-10
-5
0
5
10
15
20
2008 2009 2010 2011
% c
hang
e ov
er y
ear
Premium passengers and world trade growth
Sources: IATA, CPB Netherlands
International trade in goods
Premium passenger numbers
Business confidence has slumped
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
2008 2009 2010 2011
Air freight and purchasing managers confidence (advanced 2 months)
Sources: IATA, Haver
Growth in purchasing managers confidence
Growth in air freight
EU austerity budget measures increase
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
EU US OECD
2010 2011 2012
Change in non-interest Government deficit as a % of GDP
Airlines: slow or no growth markets in 2012Growth in global air travel (RPK) and air freight (FTK)
-10%
-5%
0%
5%
10%
15%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2008 2009 2010 2011 2012
Air travel growth(right scale)
Air freight growth
Source: IATA
-15%
-10%
-5%
0%
5%
10%
15%
40
50
60
70
80
90
100
110
120
130
140
2005 2006 2007 2008 2009 2010 2011 2012
% change versus previous year
US$
per
bar
rel
Oil price(left scale)Industrial
production growth(right scale)
Supply squeeze keeps fuel price relatively highBrent oil price and world industrial production growth
Source: OECD
Airline profits forecast to fall further in 2012
Source: IATA
-30-25-20-15-10-505101520
-9.0
-6.0
-3.0
0.0
3.0
6.019
99
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
F
2012
F
US$ billion
% re
venu
es
Global commercial airline profitability
Net posttax losses(right scale)
EBIT margin(left scale)
European airlines hit hardest in 2012
-1%
0%
1%
2%
3%
4%
5%
6%
EuropeNorth
AmericaAsia
PacificMiddle East
Latin America Africa
% o
f rev
enue
Net post -tax profits as a % of revenues
2010 2011F 2012F
Source: IATA
Eurozone is still not out of trouble
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2008 2009 2010 2011
Italy
Spain
France
UK
Sweden
10-year Government bond spreads over Germany, % points
Eurozone will need additional financingBudget deficits and refinancing needs
0
100
200
300
400
500
600
Italy & Spain Greece EFSF 'rescue fund'
Refinancing need 2011
Budget deficit 2011
€bi
llion
Sources: Bloomberg
OECD’s assessment of the downside risk
-4
-2
0
2
4
6
8
10
Eurozone US China World
The OECD's assessment of the downside risk to GDP
2011
2012 central forecast
2012 OECD scenario
Little chance of other markets escaping EU crisis
40
60
80
100
120
140
2000 2002 2004 2006 2008 2010
Inde
xed
to e
qual
100
in 2
004
Passenger flows by major route area
Pacific
N. Atlantic
Within AsiaWithin Europe
Europe-Asia
9-11 dot.com bust SARS
Great recession
Volcanic ash cloud
Source: IATA
-30-25-20-15-10-505101520
-9.0
-6.0
-3.0
0.0
3.0
6.019
99
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
F
2012
F
US$ billion
% re
venu
es
Global commercial airline profitability
Net posttax losses(right scale)
EBIT margin(left scale)
OECD scenario would push airlines back into loss
Banking crisis scenario
Central forecast