After a grim start to the 21st century, global airline profits bumped up this year and are expected to be even better in 2014, according to the International Air Transport Association. This year will show a net profit of $12.9 billion. That should increase to $19.7 billion in 2014. Both are higher than anticipated as recently as September.
Jet fuel prices, which have weighed down the airline industry for years, dropped a bit to allow greater profits. Net profits were 1.1 percent of revenues in 2012, 1.8 percent in 2013 and are forecast at 2.6 percent in 2014.
“Overall, the industry’s fortunes are moving in the right direction,” said Tony Tyler, IATA’s 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. On average, airlines will only make a net profit of about $5.94 per passenger in 2014.”