The good news is that IATA is forecasting another profitable year for airlines; a global net profit of $19.7 billion in 2014 that will mark an almost $7 billion improvement over the profit anticipated for 2013.

The bad news is that regulators and consumer rights lobbyists around the world will likely use that profitability to argue that airlines need more regulation to keep them in check. That is not only wrong, but it’s an attitude that can have unintentional consequences which limit customer choice and service. And it’s based on the highly false idea that airlines are raking it in.


Even if it succeeds in meeting this year’s profit expectations, the airline industry’s global net margin will be just 2.6%; or $6 per passenger. IATA DG and CEO Tony Tyler put this in perspective by pointing out that McDonald’s global margin is about 20%. None of us demands the same levels of technology, consistent safety standards, rigor and professionalism from a fast-food restaurant as we do an airline.


Perhaps the most notorious example of bad politicking in 2013 was the European Commission’s astonishing move to include aviation in its regional emissions trading scheme after the industry pulled out all the stops at the ICAO Assembly in Montreal and agreed a path to a global agreement of marketbased measure for aviation.


But there have been many more examples of bad regulation and misguided taxation. EU Regulation 261 and the US Dept. of Transportation’s tarmac delay rule spring to mind. These are the type of rules that make lawmakers feel good, but they take away flexibility from airlines to better serve their customers, and they force airlines to cancel flights rather than risk huge delay fines. Of course passengers want to arrive on time. But if asked, most of them would probably sit through a delay than have their flight cancelled altogether. DOT policy is pushing up the numbers of flight cancellations. It should also be noted that it’s not the traveler with nowhere to go who gets the benefit of the fine. That money goes straight into the pockets of the Treasury.


Passengers have rights, but airlines aren’t cash cows and in a tough competitive market, they must fight hard for every reservation. The best thing that regulators could do this year on behalf of passengers is to step back and allow airlines to use their hardwon profitability to invest in better customer service products.