IATA: Global Airlines To Stage Strong Performance In 2016

KUALA LUMPUR, Feb 11 (Bernama) -- Global airlines are expected to stage a strong performance in 2016, driven by increased passenger traffic, said the International Air Transport Association (IATA). The IATA said declining oil prices and competitive pressures within the industry would likely translate into further declines in fares this year as fuel hedges unwind. "Global air passenger traffic grew by 6.5 per cent in 2015 as a whole, its fastest pace since 2010, boosted by the fall in global air fares. "We expect another strong year in 2016," it said in a note. Brent crude oil prices fell to a 12-year low of US$26 per barrel in January on the back of weakening demand outlook. The IATA said if sustained, the falls in oil prices seen over the past three months would reduce the industry’s annual fuel bill by about US$12 billion in 2016, although hedging will delay these benefits. During the fourth quarter last year, airline financial results pointed to a strong end to 2015, with significant improvements in North America and Europe. "We only have the fourth quarter 2015 results from 14 airlines so far, but net post-tax profits in this sample were over 50 per cent higher than in the same quarter of 2014, representing an operating margin of 15.2 per cent. "We still expect a strong financial performance for the industry in 2016," it added. --BERNAMA