According to the body, this likely to rise to $25.0 billion in 2015, adding that lower oil prices and stronger worldwide GDP growth are the main drivers behind the improved profitability.
IATA noted that consumers will benefit substantially from the stronger industry performance as lower industry costs and efficiencies are passed through.
The expected $25 billion net post-tax profit represents a 3.2 per cent margin. On a per passenger basis, airlines will make a net profit of $7.08 in 2015. That is up on the $6.02 earned in 2014 and more than double the $3.38 earnings per passenger achieved in 2013, it stated.
The Director General, IATA, Tony Tyler said: "The industry outlook is improving. The global economy continues to recover and the fall in oil prices should strengthen the upturn next year. While we see airlines making $25 billion in 2015, it is important to remember that this is still just a 3.2 per cent net profit margin.
"The industry story is largely positive, but there are a number of risks in today's global environment--political unrest, conflicts, and some weak regional economies- among them. And a 3.2% net profit margin does not leave much room for a deterioration in the external environment before profits are hit".
"Stronger industry performance is good news for all. It's a highly competitive industry and consumers--travelers as well as shippers--will see lower costs in 2015 as the impact of lower oil prices kick in. Airline investors will see ROIC move closer to the WACC. And a healthy air transport sector will help governments in their overall objective to stimulate the economic growth needed to put the impact of the global financial crisis behind them at last," said Tyler.
The body revealed that passenger traffic is expected to grow by 7.0 per cent in 2015 which is well-above the 5.5 per cent growth trend of the past two decades, stating that capacity growth is expected to outstrip this slightly at 7.3 per cent, pushing the passenger load factor to 79.6 per cent.
Despite relatively weak profitability, IATA stressed that the airline industry has continued to add value to its consumers, to the wider economy and to governments.
According to the international body, aviation's global connectivity now spans 16,161 city-pairs (2014), which is nearly double the number in 1994. This connectivity, it said has been a catalyst for economic benefits both for users and the wider economy.
It noted that over that same period, airlines have halved the cost of air transport, after inflation, which has been a major stimulus for trade, tourism, and foreign direct investment associated with global supply chains.
It said that airlines are expected to use some 282 billion liters of fuel in 2015. In doing so, the industry is expected to emit 751 million tonnes of carbon. While that is a 5.1 per cent increase on the previous year, it is decoupled from the 6.8 per cent (ATK) increase in overall capacity to meet consumer demand. Furthermore, it stated that investments in new aircraft are a major driver of fuel efficiency improvement, revealing that in 2015 airlines are expected to take delivery of 1,700 new aircraft worth $180 billion. About half of these are expected to replace less fuel-efficient older aircraft.
However, it said the industry has remained committed to achieving carbon-neutral growth from 2020.
Aside that, all regions are expected to report improved net profitability in 2015 over 2014. However, there are stark differences in profitability among the regions. Current and forward-looking industry financial assessments should not be taken as reflecting the performance of individual airlines, which can differ significantly, said IATA.
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