Airlines end on high note

Airlines’ financial performance continued to climb in the fourth quarter of last year with some carriers showing a 24% rise in net profit.

Thirteen airlines surveyed by the International Air Transport Association (IATA) posted a combined post-tax profit of US$1.55 billion from October to December 2014, up from $1.25 billion year-on-year.

The increase was largely driven by North American airlines, where consolidation and cost-cutting resulted in significant profit gains, said the trade group that represents 240 airlines, 84% of global air traffic.

Initial financial results show eight North American airlines collectively made $1.14 billion, up from $976 million year-on-year.

Four Asia-Pacific airlines showed signs of improvement with $349 million in fourth-quarter profit, up from $322 million a year ago. However IATA cautioned that profitability for Asia-Pacific airlines could change as more results are reported, noting the region’s financial performance has been weak for some time, hampered by overcapacity and weakness in cargo revenues.

IATA’s latest airline financial monitor seems to support the association’s projection issued last December that the global airline industry could end 2014 with a net profit of $19.9 billion, up from $10.6 billion in 2013 and $6.1 billion in 2012. This year IATA forecast the industry would post a net profit of $25 billion.

IATA said air travel growth remained strong in December while air freight demand gained recently, despite developing concerns over the health of the global economy. Passenger load factors also improved in December, but air freight load factors lost ground on significant growth in capacity in Asia-Pacific.