IATA revised its 2010 financial forecast for the airline industry, and the news is relatively good.
IATA still predicts a large loss, but half of what it forecasted in December. On Thursday, IATA predicted airlines would lose $2.8 billion in 2010, down from $5.6 billion.
IATA also lowered its 2009 loss estimate to $9.4 billion from the previously forecasted $11 billion loss.
Passenger demand has risen sharply in the Asia-Pacific and Latin America regions, where demand for international travel in January increased 6.5% and 11%, respectively, according to IATA.
IATA said demand in North America and Europe rose 2.1% and 3.1%, respectively, for the same month.
"We are seeing a definite two-speed industry," said IATA CEO Giovanni Bisignani. "Asia and Latin America are driving the recovery. The weakest international markets are North Atlantic and intra-Europe, which have continuously contracted since mid-2008."
Passenger demand for 2010 is now forecasted to grow 5.6%, an improvement on IATA's previous forecast of 4.5% growth.
IATA expects that increased demand, when combined with tight supply due to 2009 capacity cuts, will result in higher yields.
"The industry has been wise in managing capacity," Bisignani said. "Prices are beginning to align with the costs -- premium travel aside. We can be optimistic but with due caution.
"Important risks remain. Oil is a wild card, overcapacity is still a danger and costs must be kept under control -- throughout the value chain and with labor," said Bisignani.
