Jump in Global Airline Profits Expected
An increase in revenue is expected to drive slightly higher profits for global airlines in 2013, offsetting a rise in expenses, according to a report released today by the International Air Transport Association (IATA), a trade association representing some 240 airlines around the world comprising 84% of global air traffic.
Airlines are expected to produce a combined profit margin of 1.6% in 2013, up from the IATA's earlier projection of 1.3%. Though projections for the airline industry's net profits are $10.6 billion this year, up from the $8.4 billion IATA had initially forecast, improved global economic conditions are pushing fuel costs higher. According to IATA director general and CEO Tony Tyler, "We are seeing a $12 billion improvement in revenue, and a $9-10 billion increase in costs -- most of which is related to fuel."
Regionally, the Asia Pacific market is expected to contribute the most profit in the airline industry, $4.2 billion, per the IATA. North America airlines are estimated to report $3.6 billion, according to the report, up from the $2.3 billion profit the region generated in 2012. The Middle East, Latin American, and African regions should all post net profits in 2013, of $1.4 billion, $600 million, and $100 million, respectively.
The article Jump in Global Airline Profits Expected originally appeared on Fool.com.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.