‘Air­lines to post record US$40b prof­its this year’

The Sun (Malaysia) - - SUNBIZ -

SIN­GA­PORE: Global air­lines are ex­pected to post record prof­its of al­most US$40 bil­lion (RM164.4 bil­lion) this year, the head of in­dus­try body IATA said yes­ter­day, but he warned the sec­tor faced threats from ter­ror­ism, a sharp rise in oil prices and pro­tec­tion­ism.

Alexan­dre de Ju­niac, who took the reins at the In­ter­na­tional Air Trans­port As­so­ci­a­tion (IATA) on Sept 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 US$39.4 bil­lion, up from US$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 US$127 bil­lion this year, down 44% from 2014 when oil prices peaked at more than US$100 a bar­rel.

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

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

The IATA chief also urged South­east Asian gov­ern­ments to in­vest in air­ports and air traf­fic con­trol sys­tems to keep pace with the rapid in­crease in pas­sen­ger num­bers, driven by low-cost car­ri­ers. – AFP

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