The world’s five biggest airlines now hail from Asia and Latin America, highlighting the industry’s shift away from the U.S. and Europe to higher-growth countries, the International Air Transport Association said Tuesday.
Air China is twice the size of either Delta in the U.S. or Germany’s Lufthansa. But despite emerging markets’ strength and a broad earnings rebound this year, weak economic conditions in Europe and low margins are acting as a drag on profits, the group warned.
“The world is changing in aviation, and it’s changing very, very quickly,” IATA Chief Executive Giovanni Bisignani told a news conference in Geneva. “Rapidly developing markets are shifting the industry’s center of gravity to the East.”
Air China has a market capitalization of $20 billion, followed by Singapore Airlines with $14 billion and Hong Kong-based Cathay Pacific with $12 billion.
China Southern has a market cap of $11 billion, as does LATAM, the Latin American airline recently created from the merger of Chile’s LAN and TAM of Brazil. U.S. carrier Delta and Germany’s Lufthansa follow with market capitalizations of $10 billion each.
IATA said strong growth in developing countries and a rebound in North America are largely responsible for the industry’s recovery this year.
Airlines will see net profits of $15.1 billion in 2010, IATA said. This marks a massive turnaround from the $10 billion industry loss in 2009 and $16 billion loss in 2008.
Asian carriers will contribute $7.7 billion to the global total, while North American airlines will earn $5.1 billion. Europe, with estimated net profits of $400 million, lags behind the Middle East ($700 million) and Latin America ($1.2 billion). African carriers will earn $100 million this year, IATA said.