Airlines Profits to Drop 29% in 2012?

The International Air Transport Association (IATA) has said the airline industry’s earnings are likely to fall by a third next year, down to US$4.9bn (£3.1bn) in 2012, from US$6.9bn this year. 
At the same time IATA expects the airlines’ revenues to increase, so it sees the reduced profits as being due to rising costs.
Profits for European carriers are estimated do drop by 80% to around US$300m as the Euro debt crisis affects sales.
IATA’s current forecast of US$6.9bn profit for the airline industry this year is better than the US44bn it had predicted in June.
“Why are we doing better than previously expected? It’s about travel volumes,” Chief Executive Tony Tyler explained.
“Despite the economic doom and gloom, people are travelling.”
IATA says that in the seven months to July, passenger numbers were up 6.4% over the previous year, but cargo statistics are largely unchanged.