Airline industry expects to make profit of US$5.65 per passenger

March 12, 2014

GENEVA – The International Air Transport Association (IATA) says the airline industry remains on track to deliver a second consecutive year of improved profitability - despite a slight downward revision to its industry outlook for 2014 to an industry-wide profit of US$18.7 billion (previous forecast US$19.7 billion).

The main driver of the downward revision is higher oil prices which are now expected to average US$108 per barrel (Brent) which is US$3.5 per barrel above previous projections. IATA says the US$3 billion added cost on the industry’s fuel bill is expected to be largely offset by stronger demand, especially for cargo, which is being supported by a strengthening global economy. Overall industry revenue is expected to rise to US$745 billion (US$2 billion greater than previously projected).
"In general, the outlook is positive. The cyclical economic upturn is supporting a strong demand environment. And that is compensating for the challenges of higher fuel costs related to geo-political instability. Overall industry returns, however, remain at an unsatisfactory level with a net profit margin of just 2.5%," said Tony Tyler, IATA’s Director General and CEO.
The aviation industry retains on average US$5.65/passenger in net profit. This is improved from US$2.05 in 2012 and US $4.13 in 2013. But it is below the US$6.45 achieved in 2010.  www.iata.org (ATI)..