IATA has trimmed its industry profit expectations for this year by $1 billion to $11.7 billion on a slower market improvement than expected, but sees profits rising further next year in its first projections for 2014.
The trade body says that while the airline performance continued to improve in the second quarter, this was at a slightly slower pace than it projected in its June forecast of a $12.7 billion profit for 2013.
"Profitability continues on an improving trajectory. But we have run into a few speed bumps," says IATA director general Tony Tyler. "Cargo growth has not materialised. Emerging markets have slowed. And the oil price spike has had a dampening effect. We do see a more optimistic end to the year."
An industry profit of $11.7 billion this year would still mark an improvement on the $7.4 billion profit the industry made in 2012.
The biggest change in IATA's outlook is in the Asia-Pacific region, downgrading its profits forecast for the region by $1.5 billion to $3.1 billion. This reflects slowing growth in some key developing markets and the region's carriers' relatively heavy exposure to the struggling cargo market.
By contrast IATA lifted its profit forecast for North American carriers by $500 million to 4.9 billion, while also raising its forecast for European airlines by another $100 million to $1.7 billion.
Further ahead IATA sees collective profits rising to $16.4 billion fuelled by improving global business conditions and a slight fall in oil prices - though lower yields will offset some of the improvements in traffic growth. It projects North American carriers contributing more than a third of these profits.