Global travel boom to benefit airlines

THE BOOM in global commercial aviation is expected to continue through next year as oil prices will likely stay low and more people turn to air travel as a means to get around.

The forecast made by the International Civil Aviation Organization (Icao), a United Nations agency, comes on the heels of record earnings booked by about 1,400 commercial carriers serving roughly half of the 1.1 billion tourists today.

These carriers likewise account for 35 percent of global trade by value, the Icao said.

Earnings in 2015 were bolstered by the sharp drop in fuel costs, which account for almost one third of airline operating costs.

Coupled with gains in traffic growth, Icao said the airline industry will likely end 2015 with record operating profit of about $60 billion, up 43 percent, while operating margin will expand to 7.6 percent from 5.5 percent a year ago.

“Looking forward to 2016, a further decline expected in oil prices, coupled with an improving economic scenario, should see passenger traffic and profits continue their upward trend,” the Icao said.

Gains were noted across all major global regions. Icao, citing preliminary figures, said global passenger traffic likely rose 6.4 percent to 3.5 billion in 2015.

Breaking this down, international scheduled passenger traffic, measured via revenue passenger kilometers or RPKs, was up 6.7 percent this year. European traffic was up 5.5 percent and accounted for the largest share of international RPKs at 37 percent.

This was followed by the Asia-Pacific, which grew 8.2 percent and was the second-biggest in terms of RPKs at 28 percent.