Industry Economic Performance

KEY POINTS

• Consumers benefit from lower fuel prices with lower fares, more routes, and will spend 1% of world GDP on air transport.
• Economic development is a big winner from the doubling of city pairs and halving of air transport costs over the past 20 yeas.
• Governments gain substantially from $118bn of tax next year and from almost 63 million 'supply chain' jobs.
• Load factors are forecast to slip a little as capacity accelerates, but breakeven should fall even further as fuel hedges unwind.
• Equity owners see a far better 2015 and 2016 with a 9%+ average airline ROIC, above the cost of capital for the first time.
• Credit metrics improve further with net debt, adjusted for operating leases, forecast to decline from 4x to 3.6x EBITDAR this year.
• Jobs in the industry should reach 2.61 million, productivity will be up 3.4% and GVA/employee over $100,000.
• Infrastructure use costs are rising further, plus inefficiencies in Europe alone add €2.9bn to airline costs next year.
• N American airlines perform best with a forecast 10.8% net post - tax profit margin in 2016. Africa is the weakest with a 3.5% loss.