Looking Back, Looking Ahead: The top 10 developments in 2013—and what to watch in 2014

Overall, 2013 was the global airline industry’s best year since 2010. There was modest economic growth. Passenger traffic grew strongly. Fuel prices were relatively stable. And cost discipline prevailed. But that’s oversimplifying. In reality, much of the overall success came from just North America, where four airlines—American (including US Airways), United, Delta and Southwest—accounted for 43% of the entire worldwide industry’s net profits during the first nine months of the year (among airlines that report quarterly results—i.e., most of them). The story was different elsewhere.

Airline Weekly’s 10 most noteworthy developments in 2013, in no particular order, as well as a quick glance at what to watch for in 2014:

Oil prices stayed high but calm: Airlines certainly paid more for their fuel this year than in the golden year 2010. But prices were generally stable. WTI crude oil increased a bit y/y to $98 a barrel though November of this year from $94 in 2012. The more airline-relevant Brent benchmark actually declined a bit. And the price of refined jet fuel decreased in many markets too.

Currency markets were anything but calm: Many carriers were denied the benefit of stable or falling fuel prices due to heavy exchange rate volatility. In most cases, this took the form of home nation currency depreciation versus the U.S. dollar, causing dollar-denominated expenses—most notably fuel but also aircraft leases and certain financial obligations—to spike. The most far-reaching of these depreciations was that of the Japanese yen, which significantly altered traffic flows for carriers all over the map. The yen was hardly alone, however. Joining it in decline were the Australian dollar, the Indian rupee, the Brazilian real, the Turkish lira, the Indonesian rupiah and many others.

Another boom year for aircraft orders: Airbus and Boeing have each sold more than a…

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