Transport Airlines

North America Is the Most Profitable Aviation Region, Go Figure

Mar 23, 2014 3:00 pm

Skift Take

As the CEOs of major U.S. airlines predicted, consolidation has done wonders for the bottom line.

— Dennis Schaal

Free Report: The Megatrends Defining Travel in 2015

The Latest Intelligence on the Travel Industry

Rick Wilking  / Reuters

Southwest Airlines jets wait on the tarmac at Denver International Airport in Denver January 22, 2014. IATA suggests that North American is the most profitable region in global aviation. Rick Wilking / Reuters

By region, IATA forecasts the highest 2014 EBIT (earnings before interest and taxes) margin is in North America, at 6.4% (up 0.1ppts from its Dec-2013 forecast), compared with 5.2% in 2013.

Reported figures for North America in 2013 have turned out a little better than forecast and it is benefiting from what IATA calls “structural improvements” (ie consolidation).

The Middle East is forecast to be the second most profitable region, with an EBIT margin rising from 3.8% in 2013 to 4.2% in 2014. Although Latin America is forecast to be in third place by 2014 EBIT margin, IATA has lowered its margin forecast by 1.3 ppts to 3.8%.

Asia Pacific’s 2014 margin is forecast at 3.4%, which is 1.0 ppts below the previous forecast. Europe is still forecast to be the laggard among the major traffic regions, with a 2014 EBIT margin of 1.9% (down 0.1 ppts from the Dec-2013 forecast), reflecting its struggle to shrug off the effects of the eurozone crisis and structural problems in the European airline sector.

The only region, apart from North America, to see an increse in its 2014 EBIT margin forecast is Africa, although, at 0.8% (up 0.1 ppts), it is still expected to be the world’s least profitable region.

Screen Shot 2014-03-23 at 9.51.03 AM (2) Note: bankruptcy reorganisation costs are excluded
Source: IATA

Source: CAPA – Centre for Aviation

This story originally appeared on CAPA – Centre for Aviation, a Skift content partner.

Additional links from CAPA:

Tags: ,

Next Up

More on Skift

What Travel Brands Need to Know About Facebook’s New Updates
This Week in Travel Startup Funding: Meerkat, Rover and More
Daily Travel Startup Watch: QueroPassagem, bigfly Travel Group and More
6 Best Practices for Developing a User-Generated Content Strategy