The International Air Transport Association (IATA) 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 percent net profit margin.
This significant strengthening from the $16.4 billion net profit in 2014 reflects the net impact of several global factors, including stronger global economic prospects, record load factors, lower fuel prices, and a major appreciation of the U.S. dollar.
According to IATA, all regions are expected to see an improvement in profitability in 2015 compared to last year. There are, however, stark differences in regional economies, which are also reflected in airline performance. “The industry’s fortunes are far from uniform, but there are improvements,” says Tony Tyler, IATA’s director general and CEO. “We need to keep in mind that many airlines still face huge challenges.”
The IATA projects that over half the global profit will be generated by airlines based in North America ($15.7 billion). For these carriers, the margin on earnings before interest and taxation is expected to exceed 12 percent—more than double that of the next best performing regions of Asia-Pacific and Europe.