The profitability of the world’s airlines improved in the second quarter of 2014, led by the strong financial performance of North American carriers, a report says.
However, the International Air Transport Association’s (IATA) Airlines Financial Monitor report found airlines in the Asia-Pacific region were hit by currency changes and a slumping cargo market.
The IATA report looked at the financial results of 50 airlines from around the world and found their collective operating profit rose to $US8.2 billion in the second quarter of 2014, compared with $US5.8 billion in the prior corresponding period.
Net profit after tax rose to $US5.2 billion, from $US1.9 billion.
“Airlines earn a majority of revenues in Q2 and Q3, so the expectation is for solid results at this time of year,” IATA said.
“Our sample of 50 airlines shows that airlines were also able to improve financial performance on the year ago period, at both the operating and net profits levels.
“The improvement has been driven by the performance of North American airlines.”
IATA found the 14 North American airlines surveyed increased operating profit 62 per cent to $US6 billion in the second quarter of 2014, while net profit almost doubled to $US3.7 billion from $US1.9 billion in the prior corresponding period.
However, the 16 Asia-Pacific carriers surveyed suffered a drop in operating profit from $US245 million in 2013 to a loss of $US21 million this year.
“In Asia Pacific, a combination of weakness in cargo revenues as well as rising cost pressures for Chinese carriers due to a depreciating local currency have had negative impacts on regional financial performance,” IATA said.
On a net profit after tax basis though, Asia-Pacific carriers achieved a $US234 million profit, a big turnaround from a loss of $US349 million in the same period a year ago.
IATA said airlines in Europe also performed well, with operating profit up 26 per cent to $US2 billion and net profit more than doubling to $1.1 billion.
Yields continued to be weak outside the United States due to exchange rate distortions, the report said.