Travelers are wondering what impact good news for the airline industry, in terms of climbing passenger demand and falling losses, will have on fliers ability to find future cheap airplane tickets and cheap vacation packages. IATA (International Air Transport Association) is now forecasting that airlines will lose $2.8 billion in 2010, vs. the $5.6 billion it forecasted last December.
Rising passenger demand is the primary reason for the new projection, with passenger traffic up in January 6.5 percent in Asia-Pacific and 11 percent in Latin America. Traffic rose 2.1 percent in North America and 3.1% in Europe.
Asia and Latin American are driving the airline industrys recovery, according to IATA. The international markets showing the poorest performance continue to be North Atlantic and intra-Europe, which have seen traffic fallings since mid 08.
Growth in 2010 passenger traffic is projected at 5.6 percent by IATA, vs. its previous estimate of 4.5 percent. Airlines are expected to fly fuller planes this year as a result of this increased demand and the 2009 capacity reductions made by the airlines.
Actual airline profitability will be closely tied to the price of oil and labor costs, particularly since many labor contracts are currently in negotiation.
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