Rebounding airline sector yet to clear trees

GLOBAL airline industry profits could hit a record high this year, helped by falling jet fuel prices, rising travel demand and cost-cutting. The International Air Transport Association (Iata) predicted last month that industry profit for 2014 is likely to hit US$19.7 billion - well above the US$12.9 billion expected last year and the US$7.4 billion made in 2012.

But the Geneva-based group, which represents 240 airlines or 84 per cent of total air traffic, also noted a steady deterioration in margins. This year's profit will come from projected revenues of US$743 billion. By contrast, 2010's US$19.2 billion profit was made on revenues of just US$579 billion.

Indeed, as Tony Tyler, director-general and CEO of Iata noted, the profit would amount to a little less than US$6 per passenger. "To put that into perspective, the McDonald's down the road here in Geneva will make about the same amount of profit by selling four Happy Meals at a cost in Geneva of US$30."