The Air Transport Association of America is
projecting an aggregate net profit of approximately $4 billion for
passenger and cargo airlines in 2007, according to its annual economic
outlook.ATA estimates that the airline industry will report 2006 earnings
ranging from $2 billion to $3 billion. A profitable 2006-2007 would be
the first back-to-back period of profitability since 1999-2000.
“The outlook for 2007 is the most promising in years, thanks to a
healthy revenue environment and the realization of extensive
cost-reduction efforts,” said ATA Chief Economist John Heimlich. “The
real challenge, however, will be to achieve meaningful and sustainable
profits and to improve credit ratings to the point where airlines can
weather normal economic turbulence while simultaneously investing in
The report states that sustained financial health would help airlines
enhance the customer experience, acquire new aircraft, refurbish
facilities, retain talented employees and promote economic stability,
but events beyond airlines’ control could easily push them off course.