IATA expects airline profits to hit US$18 billion in 2014
June 3, 2014, 12:04 am TWN
DOHA--The International Air Transport Association (IATA) said on Monday that it expects airline companies to record combined net profits of US$18 billion this year.
Revenues were forecast to reach US$746 billion, IATA director general Tony Tyler said in Doha, pointing out that net margins stood to average 2.4 percent only.
"It sounds impressive. But the brutal economic reality is on revenues of US$746 billion dollars we will earn an average net margin of just 2.4 percent," he said.
This amounted to less than US$6 per passenger, added Tyler, who was speaking at an IATA-organized annual conference of the airline industry in the Qatari capital.
"The good news is that airline profits are improving. The average return on invested capital today is 5.4 percent — up from 1.4 percent in 2008," said Tyler.
"But we are still far from earning the 7-8 percent cost of capital that investors would expect," he added.
He said there was still huge potential for development in the sector.
IATA said in March that some 240 carriers representing 84 percent of global air traffic had revised down their profit forecast for 2014 to US$18.7 billion from US$19.7 billion.
Tyler said the industry was celebrating 100 years of aviation in which 3.3 billion passengers will have traveled and 52 million tonnes of cargo transported.
In total, some 50,000 destinations are linked through around 100,000 daily flights, while the industry generates more than 58 million job opportunities worldwide.