IATA hikes 2015 global airline profit forecast to $29 billion
By Victoria Bryan and Tim Hepher
MIAMI/PARIS (Reuters) - Global airlines raised their forecast for 2015 industry profits by more than 17 percent to $29.3 billion on Monday, almost doubling from last year and heralding a boom for carriers in North America that stand to reap half the worldwide total.
The International Air Transport Association (IATA), announcing the upgrade during a gathering of 260 member airlines, said lower oil prices were the main factor pushing the industry further into the black. But the windfall could be muted by the rise in the value of the dollar and widespread airline fuel hedging.
"The industry's profits are far from uniform. Many airlines still face huge challenges," IATA Director General Tony Tyler said in a declaration to the airline lobby's annual meeting.
IATA had previously forecast a $25 billion 2015 profit.
It said the industry's average net profit margin would almost double to 4 percent from last year's 2.2 percent. It saw the fuel bill dwindling to $191 billion from $226 billion in 2014, when airlines made a restated profit of $16.4 billion.
At the same time, planes are expected to fly fuller than ever before as the industry continues to match capacity more closely to demand, though some airline bosses meeting in Miami are worried such discipline could start to fray.
"A focus on efficiency is seeing supply matched more closely than ever with demand and is expected to produce a record high load factor of 80.2 percent," IATA said, referring to the proportion of seats sold on an average flight.
The forecasts came alongside figures showing that airlines are set for a significant breakthrough in 2015, delivering returns on capital invested in them that exceed the average cost of that capital for the first time in the industry's history. Continued...