Airlines will make a record profit of £12 billion ($19.7bn) next year, but their global body IATA says margins are being squeezed.
It had originally forecast a profit of $16.4 billion for 2014, but it says cost-cutting measures, lower fuel prices and rising demand means they will be higher next year.
And this year’s profit is also expected to be $1.2 billion higher than originally forecast, at around $12.9 billion.
However, IATA said the record profit for 2014 would come from revenues of $743 billion, whereas the previous record profit figure of $19.2 billion, in 2010, came from revenues of just $579 billion.
Chief executive Tony Tyler said: "It is a tough environment in which to run an airline. Competition is intense and yields are deteriorating.
"Cargo volumes haven’t grown since 2010 and cargo revenues are back at 2007 levels. The passenger business is expanding more robustly."
Tyler said airlines would make a net profit of about $5.94 per passenger next year.
