The International Air Transport Association (IATA) revised its outlook for industry net profit upward by 72.5% to USD 6.9bn. The previously forecast figure was USD 4bn. According to the new outlook, profit should be up by 62% y-o-y in 2011. The outlook improved on an upward revision in passenger turnover to a 5.9% y-o-y increase in 2011 compared to the 4.4% y-o-y according to previous forecast. Aggregate industry revenue is projected at USD 594bn.

Impact on stock. Despite the upward revision in global industry projections, we do not see any basis for rising net income for Russian airlines. Russian passenger turnover increased by 11.7% y-o-y for 7M 11, according to Rosaviation, and for the full year we expect a slight decrease in the y-o-y growth rate due to low season and a y-o-y increase in fuel prices, which should result in declining net income. Consequently, we expect no impact on Russian airlines stocks from IATA's upward revision.

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