Global aviation industry headed for record profit | Business| Economy and finance news from a German perspective | DW | 08.12.2016
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Business

Global aviation industry headed for record profit

The aviation industry looks set to post record annual net earnings, the sector's trade association IATA has said. Even with oil prices rising again, the industry would remain profitable next year, too, it said.

The International Air Transport Association (IATA) said Thursday it expected airlines the world over to log a record net profit of $35.6 billion (33 billion euros) this year.

In 2016, the number of airline passengers will hit 3.8 billion and is forecast to close in on the 4-billion mark in 2017. By 2035, that number will have swollen to 7.2 billion, according to the IATA.

While global net earnings are expected to slide to $29.8 billion throughout 2017, next year will be profitable. "Even though conditions in 2017 will be more difficult with rising oil prices, we predict a very soft landing," IATA chief Alexandre de Juniac said in a statement.

Infrastructure woes

IATA's financial chief, Brian Pierce, pointed to large uncertainties linked to Britain's pro-Brexit vote and the recent US elections, with Donald Trump to push the US economy toward more protectionism and less reliance on taxes.

He warned that growth in the sector would only bring benefits, if infrastructure development kept pace.

"Unfortunately, I believe we're headed for an infrastructure crisis," Pierce said, emphasizing the urgent need to grow airport capacity, especially at hubs such as New York, Bangkok, Mumbai, Mexico City and Sao Paolo.

He mentioned the proposed third runway at London Heathrow, slamming the project's "outrageous costs." He said the money allocated for the runway (17 billion pounds, 20 billion euros) would have been enough to stage the 2012 Olympic Games twice over.

hg/jd (AFP, Reuters)

 

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