Citing capacity
restraint and abating fuel expenses, the International Air Transport
Association on Monday raised its 2013 global airline profit outlook to $12.7
billion from a prior projection of $10.6 billion.
Profits are expected
in every major region of the world, led by Asia/Pacific airlines with a projected
combined 2013 profit of $4.6 billion and North American airlines with a
projected $4.4 billion profit.
As airlines navigate
sluggish economic growth, passengers increasingly are getting squeezed—both
figuratively by unbundled pricing and marginally higher fares as well as literally
by ever-fuller planes.
IATA pointed to the
industry's "more efficient use of assets" as one key to financial success.
As airlines better match supply to demand, IATA expects worldwide load factor
this year to reach a "record high" average of 80.3 percent.
"Airlines are putting more people in seats," according to IATA
director general and CEO Tony Tyler. "For the first time in history, the
industry load factor is expected to average above 80 percent for the
year."
IATA indicated that
"all regions are expected to see demand grow faster than capacity,"
with the former projected to be up 5.3 percent in 2013 year over year and the
latter up 4.3 percent.
IATA anticipates aggregate
2013 revenues of $711 billion, with a la carte revenues contributing 5 percent
of the total. That's up significantly from the 0.5 percent ancillary
contribution recorded in 2007.
Meanwhile, IATA said it expects a modest 0.3 percent year-over-year improvement
in passenger yield, which is a representation of fare per mile.
Among the headwinds facing
airlines worldwide, "the outlook for global economic growth has
deteriorated slightly since March as the recession in Europe proves to be
deeper than expected," IATA explained. Still, "the beneficial impact
of lower fuel prices is expected to offset the adverse effect of weaker
economic growth, providing a moderate boost to industry profitability."
IATA pointed to
increased oil supply from North America as a factor in reduced 2013 crude oil
costs, which are expected to average $108 per barrel this year, down from the
$111.80 average last year.