THE International Air Transport Association (IATA) is anxious as the Euro zone crisis threatens the aviation industry. The IATA could face a loss exceeding $8 billion if the Euro zone crisis evolves into a full-blown banking crises and European recession. To avert this loss the Association has decided to downgrade its central forecast for airline profits from $4.9 billion to $3.5 billion for the year 2012. The profitability rate of the IATA remains weak yet unchanged at $6.9 billion for a net margin of 1.2 per cent. IATA estimates that the global aviation industry could suffer losses exceeding $8 billion in 2012.

The OECD's last economic outlook carried a risk assessment on the European sovereign debt crisis, which caused IATA to develop a second scenario for 2012 taking into account the possibility of the Euro zone crisis deteriorating into a renewed banking crisis.