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Upbeat airline industry

December 10, 2014

The global airline industry is looking ahead to a bumper year in 2015. The International Air Transport Association (IATA) said bottom-line profit was bound to surge as jet fuel prices continued to dip.

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Airbus plane, with passengers disembarking
Image: Getty Images/Afp/Behrouz Mehri

Next year was likely to bring $25 billion (20 billion euros) in net earnings for the world's airlines, the International Air Transport Association (IATA) forecast Wednesday.

The figure would be well above the $19.9 billion penciled in for this year, it added, and the $10.6 billion logged in 2013. The surge would come on the back of falling fuel costs, with crude oil prices having plunged by more than 40 percent since June, owing partly to a glut in supplies from US shale production.

The Geneva-based IATA represents a total of 240 airlines across the globe, or 84 percent of total air traffic.

Fly in the ointment

Passenger traffic has been expanding by about 5.5 percent annually for the past two decades, with cargo traffic also expected to increase by 4.5 percent next year, slightly up from current demand levels despite continuously weak markets.

IATA Chief Executive Tony Tyler warned profit margins on expected revenues of $783 billion next year would remain tight at 3.2 percent, comparing unfavorably with companies from other industries.

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He cited Starbucks as having a profit margin of about 14 percent. "[This company] will retain as much from selling seven cups of coffee as an airline will make selling an average ticket," Tyler noted.

hg/uhe (AFP, AP)