IATA predicts airline profits of US$18bn this year
"Revenues are forecast to reach US$746bn," IATA Director General Tony Tyler said in Doha, pointing out that net margins stood to average a miniscule 2.4%.
"It sounds impressive. But the brutal economic reality is on revenues of US$746bn dollars we will earn an average net margin of just 2.4%," he said.
"This amounts to less than US$6 per passenger," added Tyler, who was speaking at an IATA-organised annual conference of the airline industry in the Qatari capital.
"The good news is that airline profits are improving. The average return on invested capital today is 5.4% - up from 1.4% in 2008," said Tyler.
"But we are still far from earning the seven to eight percent cost of capital that investors would expect," he added.
He said there was still huge potential for development in the sector. IATA said in March that about 240 carriers representing 84% of global air traffic had revised their profit forecast this year from US$19.7bn to $18.7bn.
Tyler said the industry was celebrating 100 years of aviation in which 3.3bn passengers will have travelled and 52m tons of cargo transported.
In total, there are now 50,000 destinations linked through about 100,000 daily flights, while the industry accounts for more than 58m jobs worldwide.
Source: AFP via I-Net Bridge