First off, Airlines themselves are fairly profitable – now. Their earnings tend to fluctuate wildly but in sync with the price of oil.
Their EBIT margin to earn that is definitely very small though:
On average, airlines around the world have a less than 5% margin on Earnings before Interest and Taxes. That’s tiny.
They are in a very tough spot – the world needs them to exist, but airlines need to make enough of a profit to survive in the years to cover their overwhelming debt due to the volatile oil industry.
They therefore will consistently operate as frugally as they possibly can so that they can build up a war chest for the lean years that will undoubtedly return.
Originally Posted: https://www.quora.com/Do-airline-companies-really-operate-on-a-slim-profit-margin
Originally Posted On: 2016-03-03