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Mumbai : According to a report, airline companies are expecting significant reduction of losses in 2010. As per a survey recently carried out by International Air Transport Association (IATA), improvements were seen in all the indicators of airline business confidence, but it did not necessarily mean a return to profit.
The survey report stated that a divergence was evident between Asian airlines and European airlines, but for the first time since January 2008, profitability had improved in the last quarter of 2009. Almost 76 per cent expect profitability to improve over the next 12 months. IATA had earlier predicted that airline net losses will halve from USD 11 billion in 2009 to USD 5.6 billion in 2010. The report showed that there was a particularly sharp improvement in both cargo and passenger demand during the last quarter of 2009, with majority of airlines reporting rising demand. Expectations for improvements in demand over 2010 have risen back to levels last seen in 2007, with more than 82 per cent of airlines expecting further gains in passenger demand and 72 per cent expecting improved cargo demand.
The survey mentioned that there was optimism over yields, suggesting that an improvement in margins was expected. There was still a majority of airlines reporting lower yields in the last quarter of 2009. But this was significantly smaller than in October 2009 and there are huge expectations for the next 12 months.
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