Business Travel Travel Industry

Profits Soar to New Heights for Many Airlines

While reading various business travel trade magazines a particular article caught my eye.  Who would have thought the airlines would again be making money?  Lots of it.  And what does this mean to you and?—probably fewer airline ticket “bargains” and more investments in ancillary fees domestically.

The article discusses “tight capacity management,” which means strategic workload placements that consider all the relevant constraints, including utilization, technical, and policy requirements–in other words, investing in new aircraft, managing capacity by consolidating where need be and implementing more effective processes. Below are a few key exerpts from the article.

“The International Air Transport Association (IATA) on Monday (Oct.1) predicted that airlines worldwide would pull in aggregate 2012 profits of $4.1 billion, an increase of $1.1 billion from the association’s June forecast. IATA expects the global airline industry in 2013 to lift itself further away from the red by netting $7.5 billion in full-year profits.”

“IATA’s newly issued forecast improved most for North American airlines, which now are expected to rake in aggregate 2012 net profits of $1.9 billion, up $500 million from the previous forecast. The association cited “the impact of tight capacity management.”

“Regional divergences will persist in 2013,” according to IATA. “North American airlines are expected to continue to improve profitability based on tight capacity management. Asia/Pacific carriers will see a profitability boost from improved cargo volumes (if not yields). European airlines are expected to be the only region in the red for 2013, although losses will be trimmed as a result of slower capacity growth and improved global trading conditions on long-haul markets.”

To read the complete article click here.

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