Airlines profit but Europe, Latin America lag behind

As fuel prices drop and more planes fly filled to capacity, North America is leading the airline industry in profits while much of the world still struggles, officials said Monday.

Airlines are projected to make $29.3 billion in collective profit on revenues of $727 billion in 2015, said Tony Tyler, director general of the International Air Transport Association (IATA), at the group's annual meeting in Miami Beach, Florida.

Earlier profit projections had estimated a year-end profit of $25 billion for the industry as a whole.

"For the first time in IATA's records, the industry as a whole is earning its cost of capital," he said.

He added that airlines are making on average about $8.27 per passenger describing this as "a hard-earned four percent net profit margin."

A fall in the price of oil has helped boost fortunes in the airline industry, but the rising value of the US dollar has canceled out much of those gains for some carriers.

"The strongest driver of improved profitability is efficiency," Tyler told reporters.

"This year we expect airlines to fill 80.2 percent of their seats, a record high."

Furthermore, industry performance is far from uniform, with North American and Middle East airlines performing the best, he added. About half the industry's profits -- some $15.7 billion -- come from North American airlines.

Meanwhile, European, Asia-Pacific, African and Latin American carriers are performing below average, he said.

Many of the challenges airlines face involve disputes with governments, and the lack of cost-efficient infrastructure to meet demand. "A look around the world shows many deficiencies," Tyler said.

Europe faces a "quadruple whammy of faltering economies, high taxes, onerous regulation, and failing efforts toward a Single European Sky."

Europe is also expected to see a 12 percent shortfall in airport capacity by 2035.

The Asian market is mixed, with some carriers performing well but those involved with cargo "in the doldrums," Tyler said.

The Middle East is reporting the fastest growth, but military conflicts, high infrastructure costs and crowded skies are the region's main challenges.