Airlines Set to Turn Big Profit in 2010

The recession really is over, at least for airlines.

The International Air Transport Association, an industry trade group, announced Tuesday that it projects the global airline industry will make $8.9 billion in profits this year, thanks to increased demand, lower prices of jet fuel and an increase in the cost of airfare.

By comparison, the airline industry actually posted a $9.9 billion loss in 2009 and has not generated a profit since 2007, before the recession fully kicked into effect.

"The industry recovery has been stronger and faster than anyone predicted. The $8.9 billion profit that we are projecting will start to recoup the nearly $50 billion lost over the previous decade,” said Giovanni Bisignani, IATA’s CEO, in a press release.

In particular, the association noted that consumer demand for flying increased by 11% this year, yet there are fewer flights available, meaning that airlines can fill more seats and charge more of a premium.

Earlier this week, the Bureau of Transportation Statistics released its own report that also highlighted increased airline profits. This report found that the major domestic airlines posted a combined $3.09 billion in profits in the second quarter, much of which came from extra fees.

“As part of their second-quarter revenue, the airlines collected $893 million in baggage fees and $594 million from reservation change fees from April to June,” the report found.

However, airlines may still have some turbulence ahead. The IATA predicts that airlines will make a smaller profit next year of about $5.3 billion.

According to the report, “The impact of the post-recession bounce from re-stocked inventories will dissipate. Consumer spending is not expected to pick-up the slack as joblessness remains high and consumer confidence falls in Europe and North America.”

—For a comprehensive credit report, visit the Credit Center.

If you liked this article you might like

Tried and True Rules for Getting Ahead in Your Career

7 Work-From-Home Jobs You Might Not Know About

7 Work-From-Home Jobs You Might Not Know About

7 Work-From-Home Jobs You Might Not Know About

App of the Week: SaferBus

Tried & True Rules for Getting Ahead in Your Career