Loading

CAPA airline profit outlook: 2016 was top of cycle, but margins to stay above past cyclical peaks

The CAPA world airline industry operating margin model forecasts that margins will fall from 2016 to 2018, suggesting that the estimate of 8.3% in 2016 may have been a cyclical peak. This six monthly update of CAPA's world airline profit outlook, which adds 2018 to the model for the first time, attributes the expected declining margin trend to increases in oil prices and in the rate of fleet growth.

Moreover, although global economic growth is forecast by the IMF to pick up in each year from 2016 to 2018, there are many uncertainties surrounding the world economy. The IMF's Jan-2017 outlook warns that risks to global growth are skewed to the downside.

However, previous cyclical peak margins did not exceed 6%, and the CAPA model forecasts that the industry's operating margin will remain higher than this throughout the forecast period, provided that the downside risks to the global economy do not materialise. Putting the forecast into a historical context – the world's airline industry is set to remain in a period of unprecedentedly high profitability, at least until 2018.

This CAPA Premium Analysis article is 2,539 words.

To access CAPA Premium Analysis you need a CAPA Membership

Your window into the latest insights

CAPA employs an industry-leading Analyst team based in Europe, North America, Asia and Australia who offer unique perspectives and independent and accurate commentary of critical industry developments globally. CAPA Members rely on our Analysis to unlock valuable insights and actionable intelligence to keep ahead of the game.

Big picture strategic view

Our Analysts don’t just report the news - they take a big picture strategic view of aviation dynamics, issues and trends and analyse the implications of these developments for you.

Global intelligence

The CAPA Analyst team is based globally to ensure our CAPA Members have access to independent, unique perspectives covering an entire spectrum of daily, worldwide commercial aviation developments.

Customise your Alerts

CAPA Members can use CAPA Alerts to receive daily, weekly or monthly and customised updates on our Analysis.

I'm very impressed by the factual and detailed analysis CAPA is always doing.

- CEO, Airline Member
To learn more, contact us:
Phone: +61 2 9241 3200 | Email: membership@centreforaviation.com