Total airline industry net profits of $36.3 billion with an average net profit margin of 5.1% is expected by IATA for 2016 in its latest outlook.

Airplane on runway

The factors driving this outcome are, lower oil prices, efficiency gains by airlines, strong demand for passenger travel and improved economic performance in certain economies including the Eurozone.

In 2016, total passenger numbers are expected to rise to 3.8 billion over about 54,000 routes. This brighter picture reflects an improved environment this year and IATA has increased its financial expectations for 2015.

From a net industry profit of $29.3 billion forecast in June for this year, the prediction is now $33 billion with a 4.6% net profit margin.

“This is a good news story. The airline industry is delivering solid financial and operational performance. Passengers are benefiting from greater value than ever-with competitive airfares and product investments,” said IATA Director General and Chief Executive Officer, Tony Tyler.

The winners this year and in 2016, according to the IATA outlook, are North America and Europe. The two regions have the best net margins and profit per passenger in both 2015 and 2016.

The net margins are 9.5% for North America and 3.5% for Europe in 2015. In 2016, those figures are, 9.5% and 4.3%, for North America and Europe, respectively.

The profit per passenger for North America for 2015 is $22.48 an in 2016, $21.44. The profit per passenger for Europe in 2016 is $8.80 and this year it is expected to be $7.55.
 

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