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Over half IATA profits now from North America

MIAMI: IATA is forecasting a collective net profit of US$29.3 billion in 2015 for its members compared to US$16.4 billion last year.

The association says the increase reflects stronger global economic prospects, record load factors, lower fuel prices and a major appreciation of the US$.

Over 50 percent of the total (US$15.7 billion) is expected to come from North America carriers that IATA says have benefitted the most from the fall in US$-denominated fuel prices, a strong local economy and industry consolidation.

delta emiratesBy comparison, Middle East carriers will earn an expected net profit of US$1.8 billion this year; European airlines, US$5.8 billion; Asia Pacific carriers US$5.1 billion and airlines based in Latin America, US$600 million. African carriers are forecast to post a collective net profit of US$100 million.

However IATA CEO Tony Tyler warned: "Let's keep things in perspective. Apple, a single company, earned US$13.6 billion in the second quarter of this year (on revenue of US$58 billion). That's just under half the expected full-year profit of the entire airline industry. We don't begrudge anyone their business success. But it is important for our stakeholders, particularly governments, to understand that the business of providing global connectivity is still a very tough one."

One ongoing example that Tyler described as "untenable" is the Venezuelan government's continuing refusal to allow the repatriation of US$3.7 billion to airlines that have sold tickets in the country but have yet to be paid.

"In Latin America, aviation supports over 4.9 million jobs and generates US$153 billion in economic activity. Air connectivity in Venezuela has suffered because of the lack of progress over the blocked funds issue and the deterioration in the operating environment," he declared.

IATA says it expects a 5.5 percent increase in air cargo revenue to US$62 billion by the end of 2015 – down slightly from a 5.8 percent rise last year. Yields are expected to fall 7.0 overall - exaggerated by the strength of the US$ - and longer-term industry prospects "remain challenging with a continuing post-financial crisis trend of slower trade growth relative to GDP".

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