IATA director general and CEO Tony Tyler announced (07-Jun-2012) the association will revise its airline industry earnings outlook next week, taking into consideration the volatility over recent months. Mr Tyler said oil prices are still high, although moderating somewhat from recent peaks and that the European sovereign debt crisis is unresolved and we are seeing signs that it is starting to affect Asia’s export-driven economies. Passenger demand is "strong", cargo is "weak" and the industry’s profitability "remains razor thin". In Mar-2012, IATA announced its industry outlook for a USD3.0 billion profit on USD633 billion in revenues for a net margin of 0.5%. [more - original PR]
IATA: Airlines industry net margins remain 'razor thin'
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CAPA global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn. CAPA’s global airline operating margin model indicates that the industry was more profitable in 2015 than it has been for almost five decades. Moreover, the model predicts that world airline operating margins will rise further above previous historic peak levels in 2016. These new levels of profitability are mainly thanks to the low oil price environment, coupled with strong demand growth in spite of global economic growth rates that are far from exceptional.
Much of the industry is also benefiting from a period of relative capacity discipline. New revenue sources may also be helping, although their role in airline profitability is still emerging.
The macroeconomic and geopolitical backdrops provide the main risks to this forecast. Beyond that, the biggest challenge for the industry will then be to try to sustain margin levels, rather than to allow a peak to be followed by a rapid downturn, as has always happened in the past. But downturns can play a positive role in industry development, possibly even stimulating consolidation.
Global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn