Airlines Are Less Poor Than Before But Still Poorer Than Chipotle, Says IATA
Photo Credit: A Boeing 747 LCF Dreamlifter cargo plane takes off at Jabara airport in Wichita, Kan. Wichita Eagle/MCT / Jaime Green
Skift Take
Airlines are getting better at managing themselves as businesses, and the result is showing up on their bottom lines. But some of these gains come from consolidation, and are limited to the U.S.. On the whole, airlines are always vulvernable to reversals from changes in policy, fuel costs, or events they can't predict.
IATA's industry outlook predicts net profits for 2015 of $33 billion, for a margin of 4.6%, and continued strong profitability in 2016, expecting $36.3 billion profit for a 5.1% net margin.
"The strongest financial performance is being delivered by airlines in North America," Brian Pearce, Chief Economist, IATA says. "Net post-tax profits will be the highest at $19.2 billion next year. That represents a net profit of $21.44 per passenger, which is a marked improvement from just 3 years earlier. Net margins forecast at 9.5% exceed the peak of the late 1990s. This improvement has been driven by consolidation, helping to raise load factors (passenger + cargo) over 64%, and ancillaries, which together with lower fuel costs push breakeven load factors down to 55.4% next year."
Better Than Boeing, But Not Starbucks
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