IATA 2015 industry outlook up to $29.3bn net profit

The International Air Transport Association (IATA) has announced an upward revision of its 2015 industry outlook to a $29.3 billion net profit.

On expected revenues of $727 billion, the industry would achieve a 4.0% net profit margin.

The significant strengthening from the $16.4 billion net profit in 2014 (re-stated from $19.9 billion) reflects the net impact of several global factors.

This includes stronger global economic prospects, record load factors, lower fuel prices, and a major appreciation of the US dollar.

All regions are expected to see an improvement in profitability in 2015 compared with 2014. There are, however, stark differences in regional economies, which are also reflected in airline performance.

“The industry’s fortunes are far from uniform. Many airlines still face huge challenges,” said Tony Tyler, IATA’s director general and CEO.

Over half the global profit is expected to be generated by airlines based in North America ($15.7 billion). For North American airlines, the margin on earnings before interest and taxation (EBIT) is expected to exceed 12%, more than double that of the next best performing regions of Asia-Pacific and Europe.

“For the airline business, 2015 is turning out to be a positive year. Since the tragic events of September 2001, the global airline industry has transformed itself with major gains in efficiency.

“This is clearly evident in the expected record high passenger load factor of 80.2% for this year. The result is a hard-earned 4% average net profit margin. On average, airlines will retain $8.27 for every passenger carried,” said Tyler.

sourced:ttrweekly.com