The Business Times

Update: Airlines to post US$19.9b profit in 2014 and US$25b in 2015: Iata

Nisha Ramchandani
Published Wed, Dec 10, 2014 · 09:55 AM

THE world's airlines are expected to chalk up a collective net profit of US$19.9 billion, up from an earlier estimate of US$18 billion, the International Air Transport Association (Iata) said in its latest industry forecast on Wednesday.

The rosier outlook is due largely to sliding oil prices and stronger global economic growth, translating to a profit margin of 2.7 per cent for this year.

The average jet fuel price for this year is US$116.60 per barrel, compared to to US$124.50 per barrel in 2013. This is expected to ease further to an average of US$99.90 per barrel next year, contributing to a US$25 billion profit forecast for 2015.

Revenues are expected to come in at US$751 billion this year and US$783 billion next year. This means a bigger profit margin for 2015 at 3.2 per cent.

On a regional basis, North American carriers are set to be the strongest performers this year with US$11.9 billion, followed by Asia Pacific airlines at US$3.5 billion in profits.

Iata chief Tony Tyler cautioned: "The industry story is largely positive, but there are a number of risks in today's global environment - political unrest, conflicts, and some weak regional economies - among them. And a 3.2 per cent profit margin does not leave much room for a deterioration in the external environment before profits are hit."

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