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Airlines profit drop coming Oil prices are biting into airline gains The International Air Transport Association says increasing fuel prices will bite into airline profits. Image may be NSFW.
Clik here to view. Airlines will make less profit in 2016 than previously expected and profits will fall in 2017 with oil prices rising and demand slowing, the International Air Transport Association (IATA) said on Thursday.
IATA, representing some 265 airlines accounting for 83% of global air traffic, is now forecasting they will make a collective net profit of US$35.6 billion this year, against a previous forecast for US$39.4 billion. For 2017, it expects profit will fall to US$29.8 billion, breaking a streak of five years of profit growth.
However, at a predicted 7.9%, the industry''s return on capital is also expected to exceed the cost of capital in 2017 for the third year in a row, a boost for investors in the sector.
"The airlines are in a better shape to remain profitable while facing these challenges," IATA director-general Alexandre de Juniac said at a press briefing.
STAFF REPORTER
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Airlines profit drop coming Oil prices are biting into airline gains The International Air Transport Association says increasing fuel prices will bite into airline profits. Image may be NSFW.Clik here to view.
Airlines will make less profit in 2016 than previously expected and profits will fall in 2017 with oil prices rising and demand slowing, the International Air Transport Association (IATA) said on Thursday.IATA, representing some 265 airlines accounting for 83% of global air traffic, is now forecasting they will make a collective net profit of US$35.6 billion this year, against a previous forecast for US$39.4 billion. For 2017, it expects profit will fall to US$29.8 billion, breaking a streak of five years of profit growth.
However, at a predicted 7.9%, the industry''s return on capital is also expected to exceed the cost of capital in 2017 for the third year in a row, a boost for investors in the sector.
"The airlines are in a better shape to remain profitable while facing these challenges," IATA director-general Alexandre de Juniac said at a press briefing.
STAFF REPORTER
