Airline profits are expected to soar to a record high in 2014 as companies cut costs, fuel prices drop and passenger demand rises, an airline trade association said Thursday.
Globally, airlines forecast turning a $19.7 billion profit on $743 billion in revenue in 2014, up from $12.9 billion a year earlier, the International Air Transport Association said in a report. The estimate, marking two years of growth, surpasses the previous record profit, reached in 2010, when the industry enjoyed $19.2 billion in profits.
But even as total profits rise, airlines are still seeing lower profit margins amid intense competition and relatively high jet fuel costs, the report said. Airlines will make about $5.94 per passenger in 2014 — a profit margin of 2.6 percent, down from 3.3 percent in 2010. Passenger demand is fueling stronger showings. The IATA expects about 3.3 billion passengers in 2014, up six percent from the 3.1 billion passengers in 2013.