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More trips ahead as airlines enjoy another year of liftoff

/ 12:10 AM January 14, 2017

The International Air Transport Association (IATA) said the global airline industry would remain strong this 2017, with commercial carriers likely posting another year of “solid” profits backed by demand growth.

IATA, a trade organization representing about 83 percent of global air traffic, said Friday early signs were showing a positive trend for the year forward.

“In 2017, for a third consecutive year, the industry’s return on invested capital will exceed the cost of capital. Passengers benefit from the industry’s success. Travel has never been more accessible—with great fares, many options and more destinations,” IATA director general and CEO Alexandre de Juniac said.

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There were still risks: terrorist attacks, a slowdown in the global economy and rising oil prices.

Nevertheless, de Juniac said the “industry has reshaped itself and strengthened its resilience to shocks.” He said the industry should remain vigilant.

IATA also released on Friday global airline passenger traffic results for November, which showed the highest growth in nine months.

IATA said total revenue passenger kilometers, which counts passengers who bought tickets against the distance they traveled, rose 7.6 percent in November last year compared to the same period in 2015.

Capacity increased 6.5 percent, while load factor, a measure of flight utilization, rose 0.8 percentage points to 78.9 percent during the same period, IATA said.

Middle East carriers grew the fastest during the period, with demand up 12.2 percent.

Asia-Pacific and European carriers each rose 8.3 percent.

In Asia-Pacific, capacity was up 7.1 percent while load factor also rose 0.8 percentage points to 77.4 percent.

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“The strong upward trend in demand has slowed recently but it is not clear whether this is a longer-term development or just a brief pause,” IATA said.

In Europe, capacity rose 6.8 percent while load factor hit 80.8 percent, up 1.1 percentage points.

“This suggests that the disruption caused by terrorism and political instability has lifted, against a backdrop of a growing Eurozone economy,” IATA said.

North American carriers also saw traffic increase 1.5 percent in Nov. 2016.

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TAGS: Airline, Business, economy, Growth, News
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