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Airlines expect leap in profits as oil price drops

In this Nov. 13, 2014 photo, a Southwest Airlines originator flight pulls from the gate for departure from Love Field in Dallas. Throughout the airline industry, the first flight of the day sets the tone for keeping the system's flights running on-time. (AP Photo/LM Otero)
In this Nov. 13, 2014 photo, a Southwest Airlines originator flight pulls from the gate for departure from Love Field in Dallas. Throughout the airline industry, the first flight of the day sets the tone for keeping the system's flights running on-time. (AP Photo/LM Otero)

By Associated Press 1 min read

GENEVA (AP) – The global airline industry expects its profits to leap to a record high next year, helped by strong passenger demand, increased efficiency and a continued fall in jet fuel prices.

The International Air Transport Association forecasts 2015 will bring $25 billion in net profit – well above the $19.9 billion this year and the $10.6 billion in 2013 and $6.1 billion made in 2012.

That is based on a forecast that the price of oil will average $85 per barrel. On Wednesday, the U.S. contract was trading below $63 a barrel.

The Geneva-based group, which represents 240 airlines, or 84 percent of total air traffic, said profit margins on expected revenues of $783 billion are due to remain tight – only 3.2 percent, just up from 3.1 percent in 2010.