That increase and improved passenger demand will offset increased fuel
prices as the aviation industry works toward its second consecutive year
of improved profitability, IATA said. Industry profit expectations for
2014, however, have fallen to $18.7 billion from the previous estimate
of $19.7 billion because of the cost of fuel. Higher jet fuel costs will add $3 billion to the industry’s bill, according to the agency.
“In general, the outlook is positive,” Tony Tyler, IATA’s director general and chief executive
officer, said in a statement. “The cyclical economic upturn is
supporting a strong demand environment. And that is compensating for the
challenges of higher fuel costs related to geo-political instability.
Overall industry returns, however, remain at an unsatisfactory level
with a net profit margin of just 2.5 percent.”
Despite the rosy outlook for the cargo business, there are still some
obstacles, according to IATA. Cargo growth has slowed down relative to
its current stage in the economic cycle, the agency said, and
protectionist regulations from governments are harming cargo demand.
At a regional level, North American airlines will contribute the biggest share to industry profits, making $8.6 billion in 2014, the agency said. The last peak profits for U.S. airlines occurred in 2010, when they banked $4.2 billion in profits.