Airline financial outlook strengthens
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The International Air Transport Association (IATA) has increased its financial prediction for the airline industry in 2013.
The association expects airlines to return to a global net profit of US$12.9 billion, having previously lowered the figure to GBP$11.7 billion in 2013.
Further growth is also expected next year at US$19.7bn, much higher than the September forecast of US$16.4bn.
The positivity comes off the back of lower fuel prices as well as moves taken by airlines to change their structure and efficiency.
Passenger volumes are outperforming cargo operations, although on average airlines will still only make a net profit of about US$5.94 per passenger next year.
In Europe specifically profits are expected to be at US$1.7bn, rising up to US$3.2bn in 2014. Trans-altantic ventures are predicted to help the numbers along as the slump continues in Europe, particularly as high costs and taxes like Air Passenger Duty are set to rise.
“Overall, the industry’s fortunes are moving in the right direction. Jet fuel prices remain high, but below their 2012 peak. Passenger demand is expanding in the 5-6% range—in line with the historical trend. Efficiencies gained through mergers and joint ventures are delivering value to both passengers and shareholders. And product innovations are growing ancillary revenues,” said Tony Tyler, IATA’s director general and CEO.
“We must temper our optimism with an appropriate dose of caution. It’s a tough environment in which to run an airline. Competition is intense and yields are deteriorating,” he added.
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