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Global airline industry expects record profits in 2014

Increased travel demand and stable fuel prices have experts predicting airlines will have the most profitable year on record.

February 09, 2014|By Hugo Martín
  • The TSA says allegations of agents having low morale and targeting and making fun of travelers at Chicago O'Hare are lies or describe long-abandoned practices.
The TSA says allegations of agents having low morale and targeting and making… (Scott Olson / Getty Images )

The world's airline industry has rebounded from the recession and expects 2014 to be the most profitable year on record, thanks to stable fuel prices and growing travel demand.

That's great news if you're an airline executive or shareholder. But don't expect the suddenly well-off airlines to pass along their good fortune to passengers by slashing fares.

Industry experts do say the continued pressure from low-cost carriers should keep the big network carriers from imposing dramatic fare hikes.

"People don't have to worry about fare increases," said Jan Brueckner, an economics professor at UC Irvine.

Instead, airlines probably will invest more of their profits in roomier seats, better entertainment systems and tastier food. That would enable them to offer pricier seats and extras for fliers ready to move up from the economy section.

"It's a way of extracting more money," Brueckner said.

The Geneva-based International Air Transport Assn. predicted that the world's airlines will take in a combined $19.7 billion in profits this year, surpassing the previous high of $19.2 billion in 2010.

The merger of several of the United States' largest airlines helped boost profits by eliminating redundant services and cutting competition.

Airlines will use some of the profits to add seats, pay down debt, raise wages and benefits for employees and update aging equipment, said Jean Medina, a spokeswoman for Airlines for America, the trade group for the nation's airlines.

In some cases, she said, airlines will issue dividends to shareholders.

Countering carbon emissions in small ways

The next time you get a drink on a United Airlines flight, you may notice a new cup in your hand.

In an effort to become more eco-friendly, United is replacing its foam cups with recyclable plastic cups.

United is not the only airline thinking about air travel's effect on the environment.

Southwest Airlines has converted diesel-burning ramps, belt-loaders and other equipment to electric power and recently installed plane seats and interiors made with recyclable material.

Delta Air Lines recycles some of its waste and donates money generated to Habitat for Humanity, the nonprofit home-building charity.

American Airlines has replaced heavy flight manuals and maps with electronic tablets to reduce the weight of its planes.

Airline travel is responsible for about 2% of the planet's carbon emissions, or about 250 million tons of carbon dioxide each year. That tonnage is expected to grow with the demand for travel rising over the next decade, according to several studies.

TSA responds to ex-agent's allegations

A former Transportation Security Administration screener who dished dirt about the agency in a recent story was lying or describing long-abandoned practices, the agency said in response to a story in Politico by former TSA agent Jason Edward Harrington.

In the piece, Harrington described TSA agents at Chicago O'Hare International Airport who struggled with low morale, targeted travelers from specific countries for pat-down searches and poked fun at images created by full-body scanners.

In a statement, TSA Assistant Administrator LuAnn Canipe said some of the procedures and policies described in Harrington's piece were outdated or inaccurate. For example, the full-body scanners that create what look like nude images have been removed.

"TSA does not tolerate any form of unethical or unlawful behavior by its employees and takes swift disciplinary action if discovered," she said.

TSA officials said they would not pursue the allegations of misconduct that Harrington raised.

hugo.martin@latimes.com

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