The tough are still in the air

In his latest quarterly report for International Airline Transport Organisation (IATA), director general and chief executive Tony Tyler said airlines were delivering profits in difficult economic times.

"Airlines have restructured their businesses, cut costs, improved processes, invested in more fuel-efficient aircraft and much more. This combination of actions is keeping the industry's head above water—but with a profit margin of just 0.6%. It is far from an acceptable return, but almost amazing given the circumstances."

He said worldwide there has been some weak growth in the passenger business, but cargo growth is declining.

In South Africa, Mango's chief executive, Nico Bezuidenhout, said this week that year-end passenger traffic would be better than expected.

The airline expected to carry more than 200 000 travellers between December and mid-January next year — up 7% on initial projections.

Bezuidenhout expected the cost of fuel to remain relatively stable.

"At this point we do not expect major increases in the cost of petrol bar possible adjustments due to exchange rate fluctuations."

He said fuels costs had nearly doubled in six years and that energy contributed about 35% to an airline's operational costs.

Tyler said: "For African airlines we see an improvement over the previous forecast to break even. We now expect them to break even—the same result as in 2011. It is a very tough business."

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