Airline profits will reach $6.7 billion this year and will grow to $8.4 billion in 2013, according to the International Air Transport Association.
The prediction shows a slight increase over IATA’s previous estimates of $4.1 billion for 2012 and $7.5 billion in 2013. The boom in revenues will occur despite cargo activity, however, which IATA predicts will show slight growth.
Global cargo demand will increase by 1.4 percent next year, but this growth will not overtake the 2-percent loss experienced in 2012. The increase in passenger activity, and the industry movement toward larger planes with substantial cargo bellies, will exacerbate the mediocre outlook for air freight.
North American airlines are expected to show the greatest profit increases, with airlines out of the Asia-Pacific region coming in at a close second. Cargo deterioration out of Asia will cease by the end of 2013.
“Prospects for 2013 will be largely unchanged from 2012. Net profits are expected to rise to $8.4 billion, leaving the industry with a 1.3 percent net profit margin,” IATA head Tony Tyler said in a statement. “It is good that we are moving in the right direction, but the year ahead is shaping up to be another tough one for the industry.”
Governmental issues around the world remain a hindrance to airline growth, he said.
“We need to make sure that cash strapped governments understand aviation is a catalyst for economic growth and ensure that light touch regulation does not become a license for infrastructure providers to let costs get out of control,” Tyler said. - Jon Ross