Lower oil prices and growing demand from invoking the Airline profits in 2016


The number of passengers rising to 3.8 billion for 54 thousand point
International Air Transport Association "IATA" announced the potential expectations of the results of the aviation industry in the next year, 2016, which indicates that the average net profit margin will reach 5.1 percent, which will be achieved from the total net profit of 29.3 trillion US dollars, as announced, "IATA" for review to the expectations of the aviation industry in the year 2015, during which emerged from an increase in net profit as much as 33 billion from $ 29 billion was expected in the month of June.
The average net profit margin for the airline will reach 5.1 percent in 2016
This strong performance in the industry is attributed to a combination of factors, a decline in oil prices, which made it possible for airlines to achieve more profits, but the situation did not benefit from it many markets due to higher US dollar against local currencies, as well as strong demand for passenger travel , and contributed to the disappointing growth compensation to ship goods, reflecting the weak freight slow growth in trade performance is expected to improve global GDP growth to 2.7 percent in the next year in 2016, compared with 2.5 percent for the current year 2015, the show gains efficiency by airlines through the standard load high rate of 80.6 percent factors in the year 2015, maybe a little drop to 80.4 percent next year, 2016, and is expected to continue this approach because of the demand growth in 2016, however the yield still continue to decline in light of competition fierce witnessed by the industry.
Said Tony Tyler, Director General and CEO of the International Air Transport Association (IATA): "Such news We are pleased much, where it seems that the aviation industry reveal a solid levels of financial and operational performance. At the same time, travelers from that better than any benefit ever, especially during flights competitiveness and investments in product prices, on the other hand, the environmental performance achieved continuous improvement. This is the transfer of a larger number of people and companies to more places than ever before. On the other hand, employment levels achieved continuous rise look, Shareholders began to reap the returns of "natural" on their investments next year and in 2016 are expected to total passenger numbers to rise to 3.8 billion people are traveling to more than 54 thousand destinations around the world. "

He said Taylor: "This is a historic achievement for an industry that is was notorious in terms of the destruction of the capital invested which throughout its history, but let's keep on this achievement in the foreseeable future. Although the net profit is still in the range of 5 percent, we still have there is a reasonable safety barrier, Achieving revenues barely exceed the cost of capital, means that the airline has become finally meet the minimum aspirations of its shareholders, and for most other industries this is the norm and not the exception, this is achieved in light of the accumulation of expectations suggests that we approaching the upper part of the business cycle. On average, airlines still make a profit at least $ 10 per passenger carries on board its flights, the best description of the profitability in the industry at the moment is the "profit fragile" and not "sustainable".
There are many indicators that suggest that the improvement in airline profits could slow, During the year 2016 will continue the major trends that prevailed in 2015 and include the main drivers of performance over the next year 2016 as follows:
Revenues are expected to rise by 0.9 percent to 717 billion dollars and was the proceeds of the industry has reached its peak in 2014, when it recorded $ 758 billion, then dropped to $ 710 billion in 2015, with the impact of higher US dollar on revenues of non-dollar.
Demand: It is expected that the travel request on the part of passengers to grow by 6.9 percent (similar to of 6.7 percent growth that had been expected in 2015), predicted 3.8 billion passengers in 2016 with, and is expected to absorptive capacity of passengers to grow slightly more than demand rate by 7.1 percent, which means an acceleration of the expansion of the capacity by 5.5 percent in 2015, it is expected that the demand for air freight is accelerating in 2016 by up to 3.0 percent, which means provided by the growth achieved in the year 2015, amounting to 1.9 per percent.

Yield: is expected to reach travel and shipping cost to decline, with the decline in average passenger revenue to 5 percent, and the shipment of goods by 5.5 percent in 2016, and represents the pace of decline slowed from the year 2015, where it is expected that the shipping revenue decline by 18.0 and revenue passenger by 11.7 percent, the decline can be attributed to the level of 6.0 percentage points from the year 2015 to rise in the US dollar, and the impact at the expense of non-dollar revenues.
The report emphasized that is expected to check airlines in the Middle East combined profit of $ 1.4 billion in 2015, which is below the previous forecast, which was referring to the possibility of achieving $ 1.8 billion, and is expected also to recover from most of its losses with the realization of the net from profit of $ 1.7 billion in 2016, however, the airlines in the Middle East can be divided between the strong airlines in the Gulf region, for their ability to conduct long-range flights and more successful, and between airlines based regionally, and suffer from the impact of declining oil revenues and conflicts Political raging, and up the rate of profit per passenger from $ 7.97 to the expectations of 2016, slightly less than the expected level of European aviation companies, and nearly one-third of the value of profit expected to be achieved by airlines in North America.
© 2015 Al-Riyadh newspaper

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