Iata upgrades global industry outlook for 2016

Iata upgrades global industry outlook for 2016

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The outlook for the global airline industry in 2015 has been upgraded by Iata to a net profit of $33 billion from $29.3 billion forecast in June.

The airline trade body projects total net profits of $36.3 billion next year, representing an improved average profit margin of 5.1%.

Total passenger numbers are expected to rise by 6.9% to 3.8 billion travelling over some 54,000 routes in 2016.

The strengthening industry performance is being driven by a combination of factors such as lower fuel prices, higher passenger demand, a stronger economic performance in key parts of the world and improved efficiency by airlines.

However, the benefit of reduced oil costs is “strongly moderated” in many regions by the appreciation of the US dollar, Iata cautioned.

Revenues are expected to rise by 0.9% to $717 billion in 2016.

Industry revenues peaked in 2014 at $758 billion, then dropped back to $710 billion this year with the impact of the strengthening of the US dollar on non-dollar revenues.

Director general and chief executive, Tony Tyler said: “This is a good news story. The airline industry is delivering solid financial and operational performance.

“Passengers are benefiting from greater value than ever - with competitive air fares and product investments. Environmental performance is improving.

“More people and businesses are being connected to more places than ever. Employment levels are rising. And finally our shareholders are beginning to enjoy normal returns on their investments.”

But he added: “On average airlines will still make less than $10 per passenger carried. The industry’s profitability is better described as ‘fragile’ than ‘sustainable’.”


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