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Airlines Should Prepare for a Hard Landing

Recent trends point to a slowdown in revenue and a decline in profitability.

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When compared against historical results, the most recent worldwide traffic data for the airline industry points to an upcoming slowdown. Pockets of strength remain in Latin America, Europe, and the Middle East, although the European vitality is a bit of an illusion as the continent is up against easy comparisons from the Icelandic volcano eruption that forced a large shutdown of airspace in April 2010.

The table below depicts revenue passenger traffic by region from 2003 through August 2011. The rebound that occurred in 2010 appears to have fizzled out in 2011.

Neal Dihora does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.