IATA forecast

Dino D'Amore
By Dino D'Amore June 2, 2016 17:05

IATA forecast

IATA forecasts have a habit of being revised at regular intervals, but today at least IATA has confirmed that global airline industry profits are expected to increase by almost 12% in 2016. This increase in profits is driven primarily by lower oil prices allowing a forecast profit of $39.4bn this year, compared to $35.3bn in 2015 on the back of a $709bn revenue forecast. However, this forecast also predicts a slowdown in passenger demand at 6.2% growth in 2016, down from 7.4% in 2015.

“Lower oil prices are certainly helping – though tempered by hedging and exchange rates,” Tony Tyler, Iata’s director general and chief executive, said in a statement. “In fact, we are probably nearing the peak of the positive stimulus from lower prices.”

Airlines’ performance had also been boosted by record passenger load factors – the average percentage of seats filled per flight – as well as joint ventures and growth in ancillary revenues, Mr. Tyler said. “Looked at from a different angle, Starbucks will earn about $11 for every $100 in sales while airlines will make $5.60,” said Mr Tyler.

Dino D'Amore
By Dino D'Amore June 2, 2016 17:05