On expected revenues of $727 billion, the industry would achieve a 4% net profit margin.
The significant strengthening from the $16.4 billion net profit in 2014 (re-stated from $19.9 billion) reflects the net impact of several global factors, including stronger global economic prospects, record load factors, lower fuel prices, and a major appreciation of the US dollar.
All regions are expected to see an improvement in profitability in 2015 compared with 2014.
There are, however, stark differences in regional economies, which are also reflected in airline performance.
“The industry’s fortunes are far from uniform. Many airlines still face huge challenges,” says IATA director general and CEO, Tony Tyler.
According to IATA, over half the global profit is expected to be generated by airlines based in North America ($15.7 billion).
For North American airlines, the margin on earnings before interest and taxation (EBIT) is expected to exceed 12%, more than double that of the next best performing regions of Asia-Pacific and Europe.
“For the airline business, 2015 is turning out to be a positive year," says Tyler.
"Since the tragic events of September 2001, the global airline industry has transformed itself with major gains in efficiency. This is clearly evident in the expected record high passenger load factor of 80.2% for this year.
"The result is a hard-earned 4% average net profit margin. On average, airlines will retain $8.27 for every passenger carried."
He was, however, quick to add a note of caution.
“Let’s keep things in perspective. Apple, a single company, earned $13.6 billion in in the second quarter of this year," notes Tyler.
"That’s just under half the expected full-year profit of the entire airline industry. We don’t begrudge anyone their business success, but it is important for our stakeholders, particularly governments, to understand that the business of providing global connectivity is still a very tough one."
All regions will see improved profitability in 2015 compared with 2014, according to IATA, which predicts that they will also see capacity expansions but these are expected to broadly match the expansion in demand.
This aligns with the global expectation for capacity to expand 6.2%, slightly behind the projected 6.7% increase in demand. Aside from these few similarities, the regions are expected to deliver widely divergent levels of profitability.
• North America: Carriers in North America are expected to generate a profit of $15.7 billion (up from $11.2 billion in 2014) for a net margin of 7.5%. On a per passenger basis this translates to an average profit of $18.12.
• Asia-Pacific: Carriers in the Asia-Pacific region are expected to generate a $5.1 billion profit for a 2.5% net margin ($4.24/passenger). Asia-Pacific airlines have about a 40% share of the global air cargo market.
• Europe: European airlines are expected to post a collective profit of $5.8 billion in 2015 for net margin of 2.8% ($6.30/per passenger). The prospects for airlines based in the region have improved slowly over the last two years.
• Latin America: Latin American airlines are expected to return a net profit of $600 million for a net margin of 1.8% ($2.27/passenger). This follows break even performance in 2014.
• Middle East: Middle Eastern airlines are expected to post a collective $1.8 billion net return for 2015 for an average net margin of 3.1% ($9.61/passenger). The region’s carriers are expected to see a 12.9% growth in passenger numbers this year, the only region with a double-digit expansion.
• Africa: African airlines are expected to post a collective profit of $100 million for a net margin of 0.8% ($1.59/passenger), the thinnest of all regions. Although in the black, this continues the relatively poor performance of the past few years.