IATA applauded (26-Sep-2011) the commitment of G-20 finance ministers to deliver a “strong and coordinated international response to address the renewed challenges facing the global economy”. IATA urged speedy follow-up given the worsening economic conditions, particularly in Europe. IATA director general and CEO Tony Tyler said IATA sees a "worsening trend in the aviation sector with profitability due to slump to USD4.9 billion in 2012 which is a razor thin margin of just 0.8%." Economic uncertainty centred on Europe "is the biggest downside risk that we face", according to Mr Tyler. IATA called on European policy-makers to focus on aviation as a catalyst for economic growth. The region is disadvantaged by high taxes, which will be further exacerbated by the planned inclusion of aviation into the EU Emissions Trading Scheme from 2012. [more - original PR]
IATA applauds G-20 commitment to face global economic challenges
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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