Asia Pacific airlines en route to $6.6-B profit in 2016

MANILA, Philippines - Profits of Asia Pacific carriers are seen to expand by double-digit levels next year on the back of a sustained air travel strength in the region, the International Air Transport Association (IATA) said.

From an estimated $5.8 billion this year, Asia Pacific profitability, including those from the Philippines, could rise by 14 percent to $6.6 billion in 2016, according to IATA's latest airline industry outlook.

"The region's carriers will benefit more fully from the impact of lower fuel prices in 2016 as hedges unwind," said Tony Tyler, IATA director-general and chief executive officer.

The growth forecast is the third fastest for next year, following carriers in the Middle East (21.43 percent) and Europe (23.19 percent).

North American airlines could see profit inch up 1.04 percent, while their African and Latin American counterparts could post losses and smaller profits, respectively.

While cargo revenues' weakness are expected to persist, Tyler said Asia-Pacific airlines could rely on continued growth in passenger travel as new capacities are discovered.

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Passenger capacity growth could accelerate to 8.4 percent in 2016 from this year's six percent, IATA said. At the forefront are new aircraft deliveries to accommodate growth in the major emerging markets of India, Indonesia and China.

"The airline industry is delivering solid financial and operational performance. Passengers are benefiting from greater value than ever – with competitive airfares and product investments," Tyler explained.

Globally, the airline industry is estimated to generate a total net profit of $36.3 billion in 2016, up by a tenth from approximately $33 billion to be earned this year.

The same drivers of low oil prices and passenger travel demand are coupled with better economic performance in some countries, Tyler pointed out.

Global passenger travel is forecast to rise 6.9 percent to 3.8 billion next year, with passengers traveling over some 54,000 routes worldwide.

"More people and businesses are being connected to more places than ever.

Employment levels are rising. And finally our shareholders are beginning to enjoy normal returns on their investments," Tyler said.

Source: Asia Pacific airlines en route to $6.6-B profit in 2016