Airlines on course for $40b profit this year

Global airlines are expected to post record profits of almost $40 billion (Dh147 billion) this year, the head of industry body IATA said yesterday, but he warned that 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 on September 1, also called on Southeast Asian nations to invest in infrastructure to cope with surging demand for air travel in the region.

The former Air FranceKLM 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 show that the fuel bill for airlines worldwide is expected to fall to $127 billion this year, down 44 per cent from 2014.

But he sounded a note of caution for the future.

“I am not here to predict an end to the good times, but it would be unrealistic to expect them to last forever,” de Juniac warned.

“We are concerned that the gap is widening between the growth in passengers and the capacity of the existing infrastructure,” De Juniac told reporters.