IATA warned that increases in oil prices “could change completely the picture” for the aviation sector, with IATA’s forecast of USD9.2 billion in airline industry profits based on an average oil price of USD84 per barrel (mercopress, 25-Feb-2011). Oil represents 27% of airline industry costs.
Oil to cut into industry profit forecast: IATA
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CAPA airline profit outlook. Record margins from capacity restraint, but upswings are not forever
This six-monthly update of the CAPA world airline operating margin model continues to expect industry margins in 2015 to 2017 above previous cyclical peaks, albeit falling slightly in 2017. This is in spite of unexceptional global GDP growth, which has not regained its long term trend rate since 2010.
The higher level of airline operating margin from a given GDP growth rate has been due to several factors. Lower oil prices have played their part, particularly since mid-2014, as does a higher level of global traffic growth than would previously have been expected from relatively sluggish GDP growth. In addition to these external issues, perhaps the most significant factor is a greater degree of capacity discipline. This is now most deeply rooted in the US, which is now by far the most profitable airline region, helping to drive the global result.
On a more cautionary note, the IMF has recently cut its global GDP forecasts, citing Brexit and other geopolitical risks. In addition, profit warnings in recent weeks from IAG, easyJet and Lufthansa are a reminder that cyclical upswings do not last forever. A test of the airline industry's improved profitability will be its resilience in a downturn.
Global commercial aircraft deliveries fell in 2016 as Boeing again outsold Airbus; 2017 to be a peak
The global commercial aircraft fleet grew by 4% in 2016 and the year ended with an order backlog of more than nine years of production. Among the regions, North America still has the biggest and oldest fleet, but the lowest ratio of orders to aircraft in service. By contrast, Middle East has the fewest in service, but the highest ratio of orders to current fleet numbers.
This report gives an overview of the number of commercial aircraft deliveries in 2016 and the outlook into 2017 and beyond. It also looks at numbers in service and on order by region. It is based on preliminary numbers from the CAPA Fleet Database and guidance on 2016 deliveries from Airbus and Boeing, who have yet to announce final numbers.
The data indicate that total worldwide deliveries fell in 2016, the first such decline for six years, as a result of delays to new aircraft programmes. Boeing delivered more aircraft than Airbus for the fifth straight year, but its deliveries fell short of its 2015 level, while Airbus increased its numbers year-on-year. Total deliveries will likely rise again in 2017, but this may prove to be a peak year.