As Oil Price Falls IATA Sees Steep Profit Rise, Traffic Increase In 2015
The association believes airlines will make a combined profit of $25 billion in 2015, up from $19.9 billion this year, $10.6 billion in 2013 and $6.1 billion in 2012. “We see falling oil prices to give a great boost both to the industry and consumers,” IATA Chief Economist Brian Pearce said at the organization’s annual global media day in Geneva, Switzerland. He also stressed that the improvements are “not quite enough” to make the industry financially sound. Only U.S. airlines are reaching the level of profitability that allows them to recover the cost of capital. IATA believes traffic will grow by 7% as measured in revenue passenger miles (RPM). That compares to 5.7% in 2014 and 5.4% last year. Capacity will rise by 5.5%, IATA forecasts. However, the growth comes at a price and that is falling fares. Airlines expect ticket prices to go down by 5.1% on average. Overall revenues are to grow by 4.3% to $823 billion. “I am not terribly worried about overcapacity,” IATA Director G...