European aviation industry makes US$3.23 profit per passenger

01 Sep 2014

The International Air Transport Association (IATA) has given the European aviation industry a set of recommendations to improve the operating environment.

The post-tax net profit of European airlines this year is expected to be US$2.8 billion, with a net profit margin of 1.3 per cent.

The numbers represent a per passenger profit of US$3.23 profit.

North American Airlines, on the other hand, are expected to earn approximately US$11.09 for every passenger. 

One of the measures recommended to the European aviation industry to increase profit margins is increased global connectivity.

IATA's Director General and CEO Tony Tyler said connectivity helps generate job creation and economic growth in his keynote address at a European Union, the European Civil Aviation Conference and the European air transport industry dialogue session.

Other obstacles identified were taxation, regulation and infrastructure. My Tyler said governments needed to address these issues in order to increase the competitiveness of European airlines in the global industry.

"Among the biggest obstacles faced by European airlines are the competitive disadvantages placed in their way by Europe's governments. The region's airlines are over-taxed and onerously regulated," he said.

"Moreover, they suffer from a chronically mismanaged air traffic management system, insufficient airport capacity and infrastructure costs that are simply too expensive. It's time to do something about it."

Mr Tyler's identified the Single European Sky (SES) as a top priority. The SES is the European aviation's legislative framework with a focus on improving environmental, financial and economic performance of the industry. According to Mr Tyler, the cost of poor air traffic management for the consumer due to lost time and productivity is EU$6 billion.

An improved legislative environment for the European aviation industry will lead to an improved travel experience for consumers and business travel.