Global airlines set to post $12.7bn (£8.3bn) in profits

Airplane Iata says that, on average, airlines will earn about $4 per passenger, this year

Related Stories

Global airlines are expected to post $12.7bn (£8.3bn) in profits this year, the International Air Transport Association (IATA) has forecast.

Cost-cutting efforts are helping airlines generate profits despite weak economic conditions, the airline industry body said in a report.

The estimate - up on IATA's $10.6bn forecast in March - compared to profits of $7.6bn that airlines made last year.

However, despite cost savings, profits margins still remained thin, it warned.

"We now see structural change and airline efficiency measures to be the more important drivers of an improved financial performance this year," said the IATA report, published to coincide with the body's annual meeting this week, in South Africa.

Lower oil prices and record passenger numbers are also helping to drive profits, it added.

Start Quote

The day-to-day challenges of keeping revenues ahead of costs remain monumental.”

End Quote Tony Tyler Director general, IATA

Airlines are expected to fill a record 80% of seats and carry a record 3.13 billion passengers in 2013, due to the structural changes as airlines become more efficient in managing capacity, it said.

The biggest improvements are forecast to be in North America, following the formation by airlines of joint ventures to save on costs.

Airlines in Asia are once again expected to be the biggest earners, while there will also be smaller growth in Europe, IATA said.

Meanwhile, although the "direction of change is positive", profit margins remained very low.

The $12.7bn in net profits that are expected this year make up just 1.8% of estimated revenues worth $700bn, the report said.

Profits boost

"The day-to-day challenges of keeping revenues ahead of costs remain monumental," said IATA director-general Tony Tyler.

"On average, airlines will earn about $4 for every passenger, which is less than the cost of a sandwich in most places," he said.

Airlines are trying to boost profitability through a number of measures, including forming joint ventures and charging for meals, extra baggage, and priority seating.

Revenue from these "ancillary" services are expected to rise to $36bn - or 5% of total revenue - this year, said Mr Tyler.

"These are significant factors that are driving performance," he said.

More on This Story

Related Stories

More Business stories


Features & Analysis

  • Dana Lone HillDana Lone Hill

    The Native American names that break Facebook rules

  • Painting from Rothschild collectionDark arts Watch

    The 50-year fight to recover paintings looted by the Nazis

  • Mukesh SinghNo remorse

    Delhi bus rapist says victim shouldn't have fought back

  • Signposts showing the US and UK flagsAn ocean apart

    How British misunderstanding of the US is growing

Elsewhere on the BBC

  • StudentsBull market

    Employers are snapping up students with this desirable degree


  • 3D model of Christ the Redeemer statueClick Watch

    Using drones to 3D map the famous Brazilian landmark Christ the Redeemer

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.