By Stephanie Jacob
Tony Tyler
International Air Transportation Association (IATA) director-general and chief executive officer Tony Tyler said that partnerships between airlines such as the one Malaysia Airlines and Emirates recently entered into are generally good.
While saying that IATA would refrain from commenting on any one deal in particular, Tyler said: “I am talking in general, these partnerships are usually very successful because airlines have a pretty good idea of how to improve their businesses and how best to better improve feeds between themselves and other partners.
“I would say in general these sort of commercial relations add value to customers because they provide a wide range of connections and better service in the market. And in general this is good for the airline itself.”
Tyler was speaking at IATA’s global media day.
IATA also offered its global industry outlook. It said that it expects the industry to see a 5.1% increase in net profit margin to US$36.3 billion (RM154.5 billion) in 2016. It also revised their 2015 nett profit upwards to US$33 billion from its initial US$29.3 billion forecast in June.
The performance will be driven by lower oil prices which will reduce airline operational costs. The lower fuel prices will also mean lower consumer costs which will encourage more air travel.
This, however, will be moderated by the appreciation of the strong US dollar in several regions.
Demand for passenger travel in 2015 and 2016 is expected to be stronger in 2015, increasing by 6.7% and 6.9% respectively. Passenger travel revenue is expected to rise to US $533 billion in 2016.
This will drive industry revenue in 2016, which is expected to grow 0.9% next year.
Cargo demand growth is expected to moderate to 1.9% in 2015 before strengthening by 3% in 2016. Meanwhile revenue for this segment is expected to decline slightly to US$ 50.8 billion.
The industry is expected to see record high load factors in 2015 of 80.6%, however, this will taper slightly to 80.4% in 2016, while capacity is expected to increase and exceed demand growth in 2016.
Meanwhile, yields are forecasted to continue declining amid stiff competition. The cost of travel and shipping is expected to continue to decline with average yields for passengers declining by 5% and cargo by 5.5% in 2016.
However, the fall in yields in 2016 will be a deceleration from 2015, where passenger and cargo yields are expected to fall 11.7% and 18% respectively.
In terms of regional outlook, IATA said that profits in the Asia-Pacific region are expected to grow from US$5.8 billion in 2015 to US$6.6 billion in 2016. Although Chinese economy has slowed, air travel is still expected to remain strong.
Airlines in the region are expected to more fully benefit from the lower fuel prices in 2016 as fuel hedges unwind. However, the region will be the most significantly hit by the expected slower cargo growth.
Profit per passenger is expected to be US$5.13, which is less than the US$21.44 which will be seen in North America and the US$8.80 in Europe.
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