Airline profits will fall but return on capital will remain healthy, Iata predicts
Geneva — Profits for global airlines will fall for the first time in six years in 2017 as rising oil and labour costs bite and demand slows, the International Air Transport Association (Iata) said on Thursday. Iata, representing 265 airlines accounting for 83% of global air traffic, also cut its 2016 forecast for collective net profit to $35.6bn — still a record high but down from a previous prediction for $39.4bn. After a strong couple of years, airlines have found the going tough in the latter half of 2016. Attacks on airports and popular tourist destinations in North Africa and Europe have dampened travel demand for some routes. A rush to take advantage of low oil prices to offer more seats and gain customers has also put ticket prices under pressure, hindering profits. Iata said it expects airline profits to fall 16% to $29.8bn next year, of which almost two thirds, or $18.1bn, will come from North American carriers. However, at a predicted 7.9%, the industry’s return on capital...
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