AVIATION IN 2017: IATA PREDICTS $29.4b PROFIT GLOBALLY

Alexandre De Juniac, IATA’s Director General/Chief Executive Officer,

International Air Transport Association’s peep into 2017 indicates an upscale in aviation operations globally with a net result of $29.8 billion profit.

Alexandre De Juniac, IATA’s Director General/Chief Executive Officer, made the prediction against the backdrop of the prevailing world’s economic recession characterised by cut throat competition among world’s airlines coupled with cost control measures and the recent rise in oil prices.

“Though there’s optimism in the industry that there could be a slight growth in the incoming year, despite the harsh economic climate globally which has compelled many governments to introduce multiple taxation regimes,” the IATA DG/CEO insists, while assessing performance in the outgoing year and projecting into the future especially come 2017.

According to him, total revenue from global aviation operations is expected to rise  in the new year to $736 billion, representing about 4.1% increase over and above the figures of the outgoing year’s margin performance. It is expected also that that airlines across the globe would make a return on invested capital of about 79%.

Figures released by Alexandre revealed, however, that aviation fortunes of African airlines would not experience growth, rather there would be a decline in performance resulting in a loss that may amount to $800 million.

In the assessment, he traced the weaknesses in the region’s aviation sector to a number of factors including regional conflict and the impact of low commodity prices, among others.

Besides this dark spot, he predicted a growth of 4.5% despite the fact that the world’s economic conditions are expected to be more difficult in 2017.

“The risks are abundant uncertainties due to global recession, global socio-economic, political and security issues will still persist in the new year,” he noted, pointing out that aviation has assumed the status of a hyper sensitive industry in recent times.”

He however predicted the strongest performance in North America where traffic growth is expected to climb to 5.1% and capacity growth will outstrip increase in demand which may lead to lowering in the global passenger load factor to 79.8%

“The negative impact of a lower load factor is expected to be offset somewhat by a strengthening of global economic growth as the world’s Gross Domestic Product (GDP) will expand by 2.5% in the new year,” he added.

He also indicated that along with the restructuring and re-engineering in the sector in the last few years, expectations are that the both passenger and cargo traffic will stabilize in 2017.

According to him, there are prospects in cargo in 2017 which is expected to reach 55.7 million tonnes to bring about a slight rise to $49.4billion.

The IATA boss identified inefficiency in the industry which will account for billions of dollars of wasted resources in direct costs and low productivity.

De Juniac declared that IATA will, in the new year, work in partnership with both countries and governments across the globe to help them understand better and fully maximize the social and economic benefits of efficient global airlines. For instance, he said, African airlines, in the new year, are expected to experience weak performance leading to a loss of about $9.97 per passenger.