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Omaha Steve

(99,664 posts) Wed Dec 10, 2014, 07:52 AM Dec 2014

Airlines expect leap in profits as oil price drops

Source: AP-Excite

By JOHN HEILPRIN

GENEVA (AP) — The global airline industry expects its profits to leap to a record high next year, boosted by a continued fall in jet fuel prices as well as strong passenger demand and cost cuts.

The International Air Transport Association said Wednesday it 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.

FULL story at link.

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)

Read more: http://apnews.excite.com/article/20141210/eu-airlines-outlook-d289127715.html

16 replies

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Highlight:

Airlines expect leap in profits as oil price drops (Original Post) Omaha Steve Dec 2014 OP

I wouldn't bet on it. People still can't afford to fly Demeter Dec 2014 #1

...and yet the planes are completely full. brooklynite Dec 2014 #2

Now wait a minute...When oil prices increases the INdemo Dec 2014 #3

that is what I thought. littlewolf Dec 2014 #7

IATA: Air Fares Seen Dipping Thanks To Oil Slump brooklynite Dec 2014 #16

And Yet My Ticket For Xmas Cost More Than Ever billhicks76 Dec 2014 #4

But, but, but Starbucks? Deadbeat Republicans Dec 2014 #5

And there are surplus coffee beasns that are destroyed to INdemo Dec 2014 #8

Looks as though they're using the same playbook? Deadbeat Republicans Dec 2014 #9

ticket prices should be plummeting belzabubba333 Dec 2014 #6

Great! Now they can invest in cramming more seats into their Coach seating! hatrack Dec 2014 #10

Not just a leap...an explosion. SoapBox Dec 2014 #11

If they are smart, the airlines will stockpile some of those profits FLPanhandle Dec 2014 #12

So this means they will now drop that sneaky baggage fee, right? yellowcanine Dec 2014 #13

Not raises for the pilots and crew who took pay cuts... americannightmare Dec 2014 #14

nobody should be surprised: there's no such thing as a "free market," MisterP Dec 2014 #15

Demeter

(85,373 posts)

1. I wouldn't bet on it. People still can't afford to fly

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 08:20 AM

Dec 2014

brooklynite

(94,609 posts)

2. ...and yet the planes are completely full.

Reply to Demeter (Reply #1)

Wed Dec 10, 2014, 08:29 AM

Dec 2014

Here in New York, there are as many tourists as ever, and they're not all 1%ers.

Remember, even in the heart of the Depression, most people still had jobs.

INdemo

(6,994 posts)

3. Now wait a minute...When oil prices increases the

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 08:32 AM

Dec 2014

Airlines raise their fares .So when the oil prices decreases they don't lower prices they just make a larger profit.
Typical Republicanite way ..yeah they say !! "now we can still gouge our customers and make more money,Isnt this a wonderful system?"

littlewolf

(3,813 posts)

7. that is what I thought.

Reply to INdemo (Reply #3)

Wed Dec 10, 2014, 09:30 AM

Dec 2014

now ticket prices should drop.

brooklynite

(94,609 posts)

16. IATA: Air Fares Seen Dipping Thanks To Oil Slump

Reply to littlewolf (Reply #7)

Wed Dec 10, 2014, 03:54 PM

Dec 2014

GENEVA (AP) — Flying could get cheaper next year as airlines say they will finally start passing on some of the savings made on plummeting oil prices.

Carriers are forecasting record profits for 2015 thanks to cheaper fuel and rising demand. As a result, they expect to cut the average ticket price by 5 percent in 2015, excluding surcharges and taxes.

That may not be a big decrease considering that the price of crude oil has fallen 40 percent since June, but is the most carriers can do for now, the International Air Transport Association said Wednesday.

The association, which represents 240 airlines, or 84 percent of total air traffic, notes carriers are still stuck with contracts for fuel that pre-date the past months' price slump.

http://www.aviationpros.com/news/11789242/air-fares-seen-dipping-thanks-to-oil-slump?utm_source=AIRB+E-Newsletter&utm_medium=email&utm_campaign=AVVDB141204002

Why do people always leap to conclusions without doing basic research?

billhicks76

(5,082 posts)

4. And Yet My Ticket For Xmas Cost More Than Ever

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 08:32 AM

Dec 2014

They collude but hopefully some healthy competition breaks through.

Deadbeat Republicans

(111 posts)

5. But, but, but Starbucks?

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 08:54 AM

Dec 2014

Coffee prices have increased over the last year, gas prices have dropped.

INdemo

(6,994 posts)

8. And there are surplus coffee beasns that are destroyed to

Reply to Deadbeat Republicans (Reply #5)

Wed Dec 10, 2014, 09:47 AM

Dec 2014

keep prices up..

Deadbeat Republicans

(111 posts)

9. Looks as though they're using the same playbook?

Reply to INdemo (Reply #8)

Wed Dec 10, 2014, 10:11 AM

Dec 2014

In the U.S., over 200 airlines have merged, been taken over, or gone out of business since deregulation in 1978.
Source; https://en.m.wikipedia.org/wiki/Airline

belzabubba333

(1,237 posts)

6. ticket prices should be plummeting

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 08:56 AM

Dec 2014

hatrack

(59,587 posts)

10. Great! Now they can invest in cramming more seats into their Coach seating!

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 10:59 AM

Dec 2014

SoapBox

(18,791 posts)

11. Not just a leap...an explosion.

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 12:28 PM

Dec 2014

The remaining majors have downsized (or as they like to say "right-sized&quot their fleets, so they can easily fill every seat. Planes are full.

And they pretty much finally learned to avoid those suicidal airfare wars, so prices will stay up.

FLPanhandle

(7,107 posts)

12. If they are smart, the airlines will stockpile some of those profits

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 12:35 PM

Dec 2014

Because oil won't be cheap for more than a year at most.

yellowcanine

(35,699 posts)

13. So this means they will now drop that sneaky baggage fee, right?

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 12:40 PM

Dec 2014

Sure it does.

americannightmare

(322 posts)

14. Not raises for the pilots and crew who took pay cuts...

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 01:16 PM

Dec 2014

but even more profits to go into the pockets of already filthy-rich CEOs and shareholders. Gawd bless america!

MisterP

(23,730 posts)

15. nobody should be surprised: there's no such thing as a "free market,"

Reply to Omaha Steve (Original post)

Wed Dec 10, 2014, 02:55 PM

Dec 2014

since even 40 highly competitive carriers would still show a lot of oligopolistic traits (and Smith admitted this himself)

but while I hate those North Korea-style "you have it so good these days, so never complain" articles, I do say that I find ticket prices to be cutthroat on many occasions: remember, it'd be $300-400 cross-country for gas alone if you drove, and the other half of the ticket pays for a lot of airport bills

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