The International Air Transport Association (IATA) has upwardly revised its estimate for airline industry profits in 2016, amid increased travel demand and cheaper fuel. Thus, IATA estimates that next year, airlines worldwide are expected to record a profit of $36.3 billion, compared to the previously estimated $29.3 billion. For this year, IATA expects profits of $33 billion.
The net profit margin will be nearly 4.6% in 2015 and 5.1% in 2016, stated IATA Director General Tony Tyler.
European airlines are expected to record total profits of $6.9 billion this year and $8.6 billion next year, IATA announced.
IATA expects the average price of a Brent crude oil barrel to be $55 this year and to drop to $51 next year. On December 10, the price of a Brent crude oil barrel for January delivery fell by $0.15, reaching $40.11.
Recently, IATA estimated that the number of passengers carried will reach a record level of 3.5 billion in 2015.
Source: Economica
Frequently Asked Questions
Why did IATA increase its profit forecasts?
The revision is primarily due to increased demand for air travel and the significant decrease in fuel costs.
What is the estimated profit for airlines in 2016?
IATA estimates a global profit of $36.3 billion for 2016, up from the previously projected $29.3 billion.
What are the projected profit margins for the aviation industry?
The net profit margin is expected to reach 4.6% in 2015 and increase to 5.1% in 2016.