By Robert Evans and Tom Miles
GENEVA Dec 12 Airlines lobby group IATA has
raised its forecast for airline profits this year by 10 percent
and predicted passenger numbers topping 3 billion for the first
time, reflecting lower jet fuel costs, improved efficiency and
global economic growth.
The International Air Transport Association said on Thursday
it expected total airline profits to reach $12.9 billion this
year, having only three months ago cut its forecast to a total
of $11.7 billion.
In projections which are closely watched for a barometer of
the sector's health, the body also predicted profits growing to
$16.4 billion in 2014, though it said cargo demand remained
"2013 will see passenger numbers top 3 billion for the first
time, increasing to 3.3 billion in 2014," IATA Director General
Tony Tyler told a news conference.
"The average margin of the airline industry, even next year,
which if we are correct will see the highest absolute profit
ever, will be 2.6 percent. Many airlines will do better than
this and many others will underperform," Tyler said.
Profit per passenger is expected to leap to $4.13 in 2013
from $2.49 in 2012, then reach an average $5.94 in 2014, said
IATA, whose members include the likes of Lufthansa,
British Airways (part of ICAG ), American Airlines
and Cathay Pacific.
But without revenue from ancillary services such as lounge
access, priority lanes at airports and pre-approved cabin
baggage, the industry would be in the red. Ancillary revenue is
forecast at about $13 per passenger.
Improved efficiency means airlines are expected to use a
record 81 percent of available passenger capacity in 2014. But
they will struggle to use the extra cargo capacity that comes
with flying more planes.
Cargo demand is also suffering from increased trade
protectionism and a rise in costs in formerly low-wage
manufacturing countries, discouraging companies from moving
their operations abroad.
"The most worrying recent economic development has been the
apparent halt to globalization. World trade has slowed since the
recession, to grow no faster than domestic industrial
production," IATA said in its financial forecast.
The slow cargo market is likely to subdue profits at
Asia-Pacific carriers, which have 40 percent of the global cargo
market. North American carriers are expected to outperform the
global average thanks to efficiencies generated by mergers and
international joint ventures, IATA said.