The world’s airlines will post a collective profit of $12.7 billion this year, 20 percent higher than an earlier forecast of $10.6 billion in March, as cheaper fuel and cost savings offset sluggish global economic growth, the International Air Transport Association said.
But freight traffic will stall at 52.1 million metric tons as the air cargo market continues to suffer the brunt of the weak outlook in developed economies, the industry body said.
There has been no significant growth in cargo since 2012, when freight volumes reached 50.7 million metric tons.
“After a 6.3 percent fall in [cargo] yields in 2012, we expect a further contraction of 2 percent in 2013 as capacity conditions remain much more challenging than in passenger markets,” IATA said.
The new profit forecast for 2013 compares with an industry-wide profit of $7.6 billion last year.
With global revenues expected to total $711 billion this year, airlines will post a net profit margin of 1.8 percent.
“The day-to-day challenges of keeping revenues ahead of costs remain monumental,” IATA Director-General Tony Tyler told IATA’s annual meeting in Cape Town, South Africa.
“On average airlines will earn about $4 for every passenger carried — less than the cost of a sandwich in most places.”
All regions are expected to make money in 2013, led by the Asia-Pacific region, with forecasted earnings of $4.6 billion, followed by North America, with $4.4 billion.
European airlines are projected to book profits of $1.6 billion, double the March forecast of $800 million.
Middle East carriers likely will post profit of $1.5 billion and Latin American airlines about $600 million.
Africa will continue to lag the rest of the world, with 2013 net income of $100 million compared with a combined loss of $100 million last year.