KUALA LUMPUR (June 3): The International Air Transport Association (IATA) has revised its 2016 financial outlook for global air transport industry profits upwards to US$39.4 billion (from US$36.3 forecast in December 2015).

In a statement yesterday, IATA said that is expected to be generated on revenues of US$709 billion for an aggregate net profit margin of 5.6%. 2016 is expected to be the fifth consecutive year of improving aggregate industry profits. 

It said that in 2015 airlines generated a global aggregate profit of US$35.3 billion (re-stated from US$33.0 billion estimated in December 2015).

It said all regions were making a contribution to the US$4.1 billion boost over 2015 profits with improved results; but there were stark regional differences in performance.

It said over half of the industry profits will be generated in North America (US$22.9 billion) while African carriers are forecast to continue generating an overall loss (down US$0.5 billion).

IATA director-general and CEO Tony Tyler said lower oil prices are certainly helping—though tempered by hedging and exchange rates.

“In fact, we are probably nearing the peak of the positive stimulus from lower prices. Performance, however, is being bolstered by the hard work of airlines.

“Load factors are at record levels. New value streams are increasing ancillary revenues. And joint ventures and other forms of cooperation are improving efficiency and increasing consumer choice while fostering robust competition.

“The result: consumers are getting a great deal and investors are finally beginning to see the rewards they deserve," he said.