The International Air Transport Association (IATA) upgraded the global outlook for the airline industry. They anticipate a $12.7 billion profit in 2013 and is $2.1 billion better profit than projected in March of this year and an improvement on the $7.6 billion profit generated in 2012.
Though margins remain weak, the net profit margin is expected to be 1.8%. Even with this small margin it will make 2013 the third strongest year for airlines since the events of 2001.
Profitability is thin, but there is a solid performance improvement story over the last seven to eight years. More efficient use of assets is the main contributor. The industry load factor is expected to average a record high of 80.3% in 2013—6.0 percentage points above 2006 levels. Additionally, airlines have found new sources of value that have increased the contribution of ancillary revenues from 0.5% in 2007 to over 5% in 2013.
To see more from IATA: Upgraded Global Outlook
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