Airline confidence dips on fuel cost rise

The significant and continuous increase in fuel costs is set to impact negatively on airlines across the globe with many expecting to see profitability fall in the coming months. In its latest quarterly survey, the International Air Transport Association (Iata) found a sharp fall in airline confidence, with the bulk of respondents saying they were now expecting the level of profitability to fall this year, driven largely by a significant increase in fuel costs. While 55% of respondents reported improved profitability during the first quarter of 2011, almost a third reported poorer results. In March Iata revised down its forecast for 2011 industry profits to US$8.6 billion, a fall of almost half from the estimated US$16 billion profits achieved in 2010.