Airlines Flying Towards Record $33-Billion Profits: Report

Geneva: The aviation industry is set to post a second consecutive year of net profits in 2015, nearly doubling them to $33 billion (30.1 billion) thanks to low fuel prices, its trade association said on Thursday.."Our outlook for this year has improved to a $33 billion net profit," said Tony Tyler, head of the International Air Transport Association..That is an increase from the $29.3 billion the association had forecast in June..The 90 per cent jump from the record $17.3 billion in profit the industry earned last year is due in part to the sharp reduction in fuel costs as global oil prices have plunged by over 60 per cent from highs hit last year..And the industry expects to have winds at its tail in 2016, with IATA forecasting profits will rise to $36.3 billion, Tyler said..While the figures are big, the net profit margin is still only 4.6 per cent this year for the industry, after years of losses. The return on capital of airlines only barely exceeds their cost of capital, mostly thanks to low interest rates..But it is not only shareholders, but also customers who are benefiting, said the IATA, as airfares have become more competitive and airlines invested in new aircraft..On a regional basis, it is North American airlines that are earning the lion's share of the profits, at $19.4 billion this year, but will see that slip to $19.2 billion in 2016..At a profit of $21.4 per passenger, the IATA said their financial performance was at the top of the industry..European airlines are expected to post profits of $6.9 billion this year and push that up to $8.5 billion as many start to book higher savings on fuel which is often bought ahead of time at agreed prices. But the profit of $8.80 per passenger is far behind North American airlines.

Airlines Flying Towards Record $33-Billion Profits: Report

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