Airline Profits Expect to Set Records in 2014

Less competition and lower costs will boost net income

   

American Airlines4 300x199 Airline Profits Expect to Set Records in 2014Next year is expected to be a very good year for the bottom lines of major airlines around the world.

A report from the International Air Transport Association (IATA) predicts that, worldwide, large carriers will see their combined earnings jump to $19.7 billion as a wave of mergers reduces competition and cost-cutting from the economic downturn helps boost profits, Bloomberg notes.

airplane cabin interior empty 185 flickr Airline Profits Expect to Set Records in 2014
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The number of worldwide airline passengers is expected to exceed 3 billion in 2013, a record. North American airline profits will rise to $5.8 billion this year. That will surge to a projected $8.3 billion next year.

Consolidation in the industry has trimmed payrolls and elminated redundant route service. Those costs savings come as the U.S. economy is strengthening, potentially making air travel more attractive to consumers.

Asia-Pacific carriers will see their profits hit $3.2 billion in 2013, increasing to $4.1 billion next year. By contrast, European airlines will report combined net income of about $1.7 billion this year. That will surge to about $3.2 billion next year, according to the IATA.

Earlier this month American Airlines and US Airways completed their massive merger, becoming the world’s largest airline after overcoming regulators’ objections.


Article printed from InvestorPlace Media, http://investorplace.com/2013/12/airline-profits-expect-set-records-2014/.

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