CAPETOWN — Global airlines should post an industry profit of $12,7 billion this year, an increase from a previous $10,6 billion forecast, as lower oil prices and belt-tightening offset difficult economic conditions, industry group International Air Transport Association (IATA) said yesterday.
Report by Reuters
However, IATA said margins remained weak amid Europe’s ongoing debt crisis.
“The day-to-day challenges of keeping revenues ahead of costs remain monumental,” IATA director-general Tony Tyler said at a meeting of more than 200 airlines in Cape Town.
“On average, airlines will earn about $4 for every passenger, which is less than the cost of a sandwich in most places.”
Addressing reporters later, Tyler said record passenger numbers and growth in “ancillary” revenues were the two key reasons driving improved profitability.
Airlines are expected to fill a record 80,3% of seats and transport an unprecedented 3,13 billion passengers in 2013, up from 79,2% and 2,98 billion respectively last year, as operational changes and better capacity management filter through. Tyler said ancillary revenues would rise to $36 billion, or 5% of total turnover, as airlines unbundle more services from base fares and charge for additional services such as meals, extra baggage and seats.
“These are significant factors that are driving performance,” Tyler said.