Airlines make an average of four dollars per passenger
Airlines make an average of around $4 per person, less than the cost of a sandwich, according to the latest report from IATA.
Tony Tyler, the director general and CEO the International Air Transport Association, made the comparison has he unveiled the latest forecast for the industry.
He said airlines’ margins remain weak, even though IATA has upgraded its global outlook for the industry to a $12.7 billion profit in 2013, $2.1 billion better than the $10.6 billion profit projected in March of this year.
“This is a very tough business. The day-to-day challenges of keeping revenues ahead of costs remain monumental. Many airlines are struggling,” he said.
While revenues are expected to total $711 billion this year, the net profit margin is expected to be 1.8%.
“Indicative of the characteristically razor thin profits of the airline industry, even this small margin will make 2013 the third strongest year for airlines since September 11 2001,” said the report.
IATA said although profitability is thin, airlines have managed to improve their performance over the last seven to eight years through more efficient use of assets and through selling ancillary services.
Giving a regional break down, IATA said all regions are expected to report a profit in 2013, with some being stronger than others.
European airlines are expected to report profits of $1.6 billion, double the previous projection of $0.8 billion.
While this is a significant improvement, the region’s EBIT margin is expected to be just 1.3%, second lowest after Africa at 0.9%.
by Bev Fearis
Tuesday, June 4, 2013