NEW YORK — Airlines are expected to make a US$36 billion profit in 2016, for a 5.1% net margin while at the same making less than $10 for each passenger carried, says IATA’s Director General and CEO, Tony Tyler.
Speaking at the Aviation Day USA event in New York yesterday, Tyler added the North America region is leading the industry in terms of profitability. Airlines in the U.S. and Canada are expected to earn some $19.2 billion in 2016, or roughly half the industry’s global profit, he said. “These profits represent the fruit of more than a decade of toil and sweat as well as financial restructuring. Consolidation has also played a role by allowing airline managements to implement significant efficiency programs and to get the economies of density from much more efficient networks. This in turn concentrates flows of passengers, raising load factors and allowing larger aircraft with lower unit costs to be used.”
On a global basis fares are estimated to have fallen 5% in 2015 compared to 2014 after adjusting for the effects of the strong U.S. dollar. And fares were down 57% compared to 1995, after adjusting for inflation and excluding surcharges and taxes, said Tyler. In the U.S, airfares including typical ancillary fees remain around 39% below pre-deregulation levels in real terms.
Global passenger numbers are expected to reach seven billion by 2034, twice as many as the 3.5 billion in 2015.