IATA Says Airline Profits Set to Fall Sharply Next Year

Profits by airlines around the world are set to be far lower than previously forecast next year, the International Air Transport Association IATA said on Wednesday.

IATA, based in Geneva, said in a statement that it still estimated that airlines would make a total profit of $6.9 billion (5.1 billion euros) this year.

But next year this would fall to $3.5 billion from $4.9 billion expected earlier, and this could turn into a loss of $8.0 billion if the Eurozone crisis spread.

"The Eurozone crisis puts severe downside risk on the 2012 outlook as illustrated by the recently published OECD economic outlook," IATA said.

"In a worst case scenario, should the Eurozone crisis evolve into a full-blown banking crises and European recession, IATA estimates that the global aviation industry could suffer losses exceeding $8 billion in 2012."