Airlines around the world are expected to collectively generate profits of US$25 billion in calendar 2015 amid lower fuel prices and stronger global economic growth, the International Air Transport Association (IATA) says.
The forecast US$25 billion profit represented a 26 per cent improvement from the US$19.9 billion profit the global airline industry is tipped to achieve in 2014 and continued growth from US$10.6 billion profit in 2013 and US$6.1 billion in 2012.
IATA chief executive Tony Tyler says oil prices are projected to average US$85 a barrel in 2015, compared with a price of more than US$100 a barrel from 2011 to 2014.
“There’s no doubt that the recent fall in the oil price is a relief for airlines,” Tyler told reporters at IATA’s media day in Geneva on Wednesday.
All regions were expected to report improved net profits in 2015, with airlines in North America leading the way with anticipated profits of US$13.2 billion.
Strong growth is also projected for Asia Pacific airlines, who collectively were in line to post net profit of US$5 billion in 2015, from US$3.5 billion in 2014.
“Some strengthening of cargo markets, particularly in this manufacturing region, plus lower fuel costs, are expected to drive the moderate improvement on 2014,” IATA said.
Tyler cautioned that the US$25 billion profit was distributed over a “very fragmented industry with hundreds of players, hundreds of airlines”.
Moreover, the airlines’ projected 2015 net profit margin of 3.2 per cent, up only slightly from 3.1 per cent in 2014, offered little buffer to absorb a significant shock to the system such as economic uncertainty, political instability, public health emerges and terrorism.
“I have given these caveats for context and perspective, not to downplay the significance of the profit that we expect to see generated next year or the tremendous changes that are behind it,” Tyler said.
IATA’s forecasts show global economic growth of 3.2 per cent in 2015, which would be the first time since 2010 global gross domestic product (GDP) exceeded three per cent.