Falling oil prices and improved global economic growth are behind a predicted 25 per cent jump in airline profits over the next 12 months.
According to IATA’s latest economic outlook, carriers are expected to generate post-tax profits totalling $19.9bn for 2014 and this is set to rise to $25bn in 2015.
IATA analysts predict that airfares will fall by more than five per cent on average in 2015 compared with 2014 figures, while passenger numbers are expected to grow by seven per cent in 2015 – well-above the 5.5 per cent growth rate seen during the past 20 years.
However, IATA’s CEO Tony Tyler warned that profit margins remained tight at just 3.2 per cent. “This does not leave much room for a deterioration in the external environment before profits are hit,” he said.