IATA forecast airlines in 2015 to post profit of $33 bn

By: | Published: December 10, 2015 7:57 PM

Revising upwards its forecast for 2015, global airlines body IATA today said it expects airlines to post a net profit of USD 33 billion as against USD 29.3 billion estimated earlier in June this year on account of low fuel prices.

iata, iata 2015, iata airlines, airlines forecast, airlines forecast 2015, iata profit, iata 2015 profit, iata profit forecastAccording to IATA, passenger capacity growth in Asia Pacific is expected to accelerate from six per cent in 2015 to 8.4 per cent in 2016 as new aircraft are delivered largely to accommodate growth in the major emerging markets of India, Indonesia and China.(Reuters)

Revising upwards its forecast for 2015, global airlines body IATA today said it expects airlines to post a net profit of USD 33 billion as against USD 29.3 billion estimated earlier in June this year on account of low fuel prices.

For 2016, International Air Transport Association (IATA) sees an average net profit margin of 5.1 per cent being generated with total net profits of USD 36.3 billion, a release said.

According to IATA, passenger capacity growth in Asia Pacific is expected to accelerate from six per cent in 2015 to 8.4 per cent in 2016 as new aircraft are delivered largely to accommodate growth in the major emerging markets of India, Indonesia and China.

The region is, however, in the front line for the impact of continued weakness in cargo revenues, it said.

In both 2015 and 2016 the industry’s return on capital (8.3 per cent and 8.6 per cent respectively) is expected to exceed the industry’s cost of capital (estimated to be just under 7 per cent in 2015 and 2016 because of low bond yields, IATA said,

“The airline industry is delivering solid financial and operational performance. Passengers are benefiting from greater value than ever-with competitive airfares and product investments. Environmental performance is improving. More people and businesses are being connected to more places than ever,” IATA Director General and chief executive officer Tony Tyler said.

“Employment levels are rising. And finally our shareholders are beginning to enjoy normal returns on their investments,” he said.

According to IATA, the strengthening industry performance is being driven by a combination of factors including lower oil prices, strong demand for passenger travel and stronger economic performance in some key economies, among others.

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