• Wed, 12/15/2010 - 07:52
• 26 Comments

So remember when the airlines were in deep-kimshi and ready to fold in 2009? It's old news apparently, given the earnings estimates provided by the International Air Transport Association: try a cool $15.1 billion.

Was it really just last year the industry saw $10 billion in losses? And $16 billion the year before that? Hard to believe, but it's true.

Maybe the world's airlines got a bailout from the U.S. we didn't hear about.

The reasons numbers are up is partially known - the greatest being rapidly developing markets in Asia. In fact, the Asian carriers are doing booming business. Air China's market value is now double what investors are valuing Delta in the US or Germany's Lufthansa. This shift of the industry's center of gravity is representative of a fast-changing aviation world.

Though Delta still ranks as the world's number one airline by passenger miles flown - a common measure of airline size - burgeoning demand in the East will likely see Asian carriers rise up the table, especially if airlines there merge like U.S.-based carriers have in recent years.

As with many industries, 2011 is being viewed as a challenging period for aviation. Heavy debts and new taxes will weigh on consumer travel spending in Europe and North America. Even given the positive numbers, the IATA's cheif economist, Brian Pierce describes profit margins as "pathetically low" and another economic shock could threaten the industry.

Rising fuel prices are also expected to impact earnings in 2011. Renewable alternative fuels are actively being sought as a result.

IATA Chief Executive Giovanni Bisignani said at a news conference in Geneva that if "archaic ownership rules" in the United States were changed the industry might soon see the first takeover of a U.S. carrier by an Asian airline.

So the immediate crisis for the industry is over, but the future of aviation services globally promises challenges and change - much like the rest of the world's industries.