Airline Industry Profits Expected To Soar In 2015, Says International Trade Group

The global airline industry expects to make more money than ever this year. The International Air Transport Association, a trade group for the world’s airlines, announced Monday at its annual meeting in Miami that global airlines could expect profits of $29.3 billion in 2015, a 17 percent increase from the previously forecast $25 billion.

That figure is nearly double 2014’s net profits of $16.4 billion, and more than half ($15.7 billion) will go to airlines based in North America, IATA reports.

“For the airline business, 2015 is turning out to be a positive year. Since the tragic events of September 2001, the global airline industry has transformed itself with major gains in efficiency. This is clearly evident in the expected record-high passenger load factor of 80.2% for this year. The result is a hard-earned 4% average net profit margin. On average, airlines will retain $8.27 for every passenger carried,” said IATA CEO Tony Tyler in a statement.

The main reason for the airline windfall is a significantly drop in the price of jet fuel, which represents about 28 percent of the airline industry’s operating costs. (The 2015 outlook is based on the crude oil price of $65/barrel; in 2014 the price was $101.14/barrel.)

At the same time, passenger demand continues to increase, and planes are fuller than ever. IATA expects passenger traffic to grow by 6.7 percent in 2015, with total passengers taking flight exceeding 3.5 billion for the year.

But, added Tyler, “The industry’s fortunes are far from uniform. Many airlines still face huge challenges.” Average airlines not based in the U.S. are “still struggling with returns below the cost of capital and a significant debt burden,” said IATA in a statement.