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Airline Passenger Traffic Climbs Globally; Profit Outlook ‘Positive’

Airlines worldwide will carry an estimated 3.3 billion passengers in 2014, according to an industry analysis.

By University Alliance on August 07, 2014
Airline Industry Profits Set to Top $18 Billion

Strong growth in developing markets in the Middle East, Latin America and the Asia-Pacific region helped drive airline passenger demand globally in 2013, according to an industry analysis.

Overall, passenger demand climbed by 5.2% over 2012, the International Air Transport Association (IATA) reported. The trade association forecasts that airline industry profits will hit $18.7 billion in 2014 as a result of strong demand, up significantly from the $12.9 billion profit reported in 2013 and the $6.1 billion profit in 2012.

North American airlines will account for almost 46% of the projected profits in 2014, the IATA reported. On average, airlines worldwide will make a net profit of $5.65 per passenger.

“The cyclical economic upturn is supporting a strong demand environment,” IATA Director General Tony Tyler said in a March 2014 statement. “And that is compensating for the challenges of higher fuel costs related to geo-political instability.”

Tyler noted that global passenger traffic is expected to reach 3.3 billion in 2014, or the equivalent of more than 6,000 passengers boarding airlines every minute. This year, the industry is marking the 100th anniversary of commercial aviation, which began with an airboat carrying one paying passenger on the short flight across Tampa Bay in Florida.

In addition to rising passenger demand, airline capacity increased by 4.8% in 2013, as did average load factor, or percentage of seats filled, which saw a slight uptick to 79.5%. Tyler said the improving load factor is evidence that “airlines are continuing to drive efficiencies.”

The most concentrated growth in demand was for international travel, which grew 5.4%, versus domestic markets, which increased by 4.9%, according to the IATA’s year-end report.

Within the domestic air travel sector, which accounts for more than one-third of the total aviation market, China saw an 11.7% increase in 2013 and passenger traffic jumped by 9.6% in Russia. By contrast, domestic demand in the United States rose just 1.9%

According to the IATA, air carriers in the Middle East recorded the strongest overall growth – domestic and international demand combined – at 11.4%, followed by Asia-Pacific (7.1%), Latin America (6.3%) and Africa (5.2%).

Overall growth rates were substantially lower in the more-developed markets of Europe (3.8%) and North America (2.3%).

The IATA report was released within weeks of a new analysis by the Federal Aviation Administration (FAA) that projects “healthy growth” for the U.S. aviation industry over the next 20 years.

According to the FAA report, U.S. airlines will carry more than 745 million passengers in 2014 and traffic will reach 1.15 billion in 2034.

Category: 2014 Headlines