Airlines to post record $40bn profit in 2016:IATA

Airlines to post record $40bn profit in 2016:IATA

World News Live

SINGAPORE: Global airlines are expected to post record profits of almost $40 billion this year,
the head of industry body IATA said Thursday, but he warned the sector faced threats from terrorism,
a sharp rise in oil prices and protectionism (world news live).

Alexandre de Juniac, who took the reins at the International Air Transport Association on September 1, also
called on Southeast Asian nations to invest in infrastructure to cope with surging demand for air travel in the
fast-growing region.

The former Air France-KLM chief executive told the group’s symposium in Singapore that collective net profit for
the airline industry worldwide would hit $39.4 billion, up from $35.3 billion in 2015.

Speaking at his first international keynote address since taking over from Tony Tyler, de Juniac said carriers
had benefited from a sharp fall in the price of oil — fuel costs are their biggest single expense — and a resilient travel
market despite slow global economic growth.

IATA data shows that the fuel bill for airlines worldwide is expected to fall to $127 billion this year, down 44 percent
from 2014 when oil prices peaked at more than $100 a barrel.

It will be the first time since 2004 that fuel will represent less than 20 percent of airlines’ total operating cost, IATA said.

Oil prices have tumbled for the past two years and hit a near 13-year low below $30 a barrel in February
owing to a global supply glut and overproduction.

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