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Asian airlines profits expected to hit US$6.6bn in 2016

Friday, December 11, 2015

Airlines in the Asia Pacific region are expected to generate combined net profits of US$6.6 billion next year, US$800 million more than in 2015.

It is latest industry profit forecast, the International Air Transport Association (IATA) stated that the region’s airlines will continue to benefit from lower fuel prices and rising passenger traffic in 2016.

The increase in passenger numbers is expected to accelerate from 6.0% in 2015 to 8.4% next year, driven by “the major emerging markets of India, Indonesia and China”.

By way of a contrast however, a single company, Apple, posted an US$18bn profit in 2014. And the total profits for Asia’s airlines would only equate to income of US$5.13 per passenger.

Global airline profits are expected to total US$36.3bn in 2016, up from US$33bn this year. And North America’s resurgent carriers are expected to see by far the biggest gains, generating an expected US$19.2bn in 2016 (53% of the global total), or US$21.44 per passenger. This is largely attributable to US airlines’ tight management of seat capacity in relation to passenger demand.

European airlines are expected to generate combined net profits of US$8.5bn in 2016 (US$8.80 per passenger), while Middle East carriers will see collective profits of US$1.8bn (US$7.97 per passenger).

“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 airfares and product investments,” said Tony Tyler, said IATA’s director general & CEO. “Employment levels are rising and finally our shareholders are beginning to enjoy normal returns on their investments.”

Total global passenger numbers are expected to rise to 3.8bn in 2016, travelling on approximately 54,000 routes. This represents a slight acceleration in demand (+6.9% compared to +6.7% in 2015), while seat capacity is expected to increase 7.1%.

Source from Travel Daily Asia