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How Much Profit Do Airlines Make Per Passenger?

March 13, 2014 at 1:22 PM | by | Comments (0)

Higher oil prices resulting from the current crisis in Ukraine prompted the International Air Transport Association (IATA) to reduce its 2014 profit predictions from $19.7 to $18.7 billion, according to the Wall Street Journal.

To see that the industry will net close to $19 billion dollars may stir frustration in passengers who feel they are nickeled and dimed every step of the way, but further statistics released show just how slim the margin for error is for airlines, most notably concerning profit per passenger: Airlines made $2.05 per passenger in 2012; $4.13 in 2013; and predicts to make $5.65 in 2014.

Those numbers certainly explain a lot when trying to understand why the industry makes some of the decisions it does. Clearly, it lives and dies by quantity of passengers, trying to collect five dollars three to four billion times over the course of a year.

With that in mind, the fact that flying is often described as a "cattle call" seems to be pretty on point.

[Photo: IATA]

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