Iata revises up outlook for aviation

Iata revises up outlook for aviation

Iata’s 2015 airline industry outlook has been revised upwards to a $29.3 billion net profit from $16.4 billion last year.

On expected revenues of $727 billion, the industry would achieve a 4% net profit margin.

The significant strengthening in the aviation industry’s financial performance reflects the impact of several factors, including stronger global economic prospects, record load factors, lower fuel prices, and a major appreciation of the US dollar, according to Iata.

All regions are expected to see an improvement in profitability in 2015 compared with 2014.

But Iata warned of “stark differences” in regional economies, which are also reflected in airline performance.

Director general and chief executive, Tony Tyler said: “The industry’s fortunes are far from uniform. Many airlines still face huge challenges.”

More than half the global profit - $15.7 billion - is expected to be generated by airlines based in North America where the margin on earnings before interest and taxation (EBIT) is expected to exceed 12%, more than double that of the next best performing regions of Asia-Pacific and Europe.

“For the airline business, 2015 is turning out to be a positive year,” Tyler said. “Since the tragic events of September 2001, the global airline industry has transformed itself with major gains in efficiency.

“This is clearly evident in the expected record high passenger load factor of 80.2% for this year. The result is a hard-earned 4% average net profit margin. On average, airlines will retain $8.27 for every passenger carried.”

But he added: “Let’s keep things in perspective. Apple, a single company, earned $13.6 billion in in the second quarter of this year. That’s just under half the expected full-year profit of the entire airline industry.

“We don’t begrudge anyone their business success. But it is important for our stakeholders, particularly governments, to understand that the business of providing global connectivity is still a very tough one.”


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