Road Warrior

Tons of Profit, but World's Airlines Net Just $4 Per Passenger

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Airlines are expected to have their third-most profitable year since 2001, according to a new trade association report. But they'll net an average of just $4 a passenger.

The International Air Transport Association (IATA) upgraded its 2013 profit outlook for the world's passenger carriers to $12.7 billion, up 19.8 percent from the $10.6 billion predicted in March. If the forecast holds up, airlines will earn 67.1 percent more than last year's $7.6 billion.

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But because of razor-thin margins, that per-passenger profit is equivalent to the cost of a deluxe coffee.

Airlines Soar to Rare Q1 Profit
Airlines Soar to Rare Q1 Profit

"This is a very tough business," said Tony Tyler, IATA's director general and CEO, when the revised forecast was released Monday. "The day-to-day challenges of keeping revenues ahead of costs remain monumental. On average, airlines will earn about $4 for every passenger carried—less than the cost of a sandwich in most places."

That's still an improvement from 2011, however, when airlines earned $8.8 billion for the 2.8 billion passengers carried, or roughly $3.14 per passenger.

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Driving the uptick in profit is a record-breaking volume of air travelers. For the first time, passenger numbers are expected to break the 3 billion market this year, with 3.13 billion fliers projected. About 2.9 billion people traveled by air last year.

The increase means packed planes. The industry load factor, or percentage of occupied seats, is expected to average 80.3 percent, another record.

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IATA represents about 240 airlines, which account for 84 percent of total air traffic.