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Airlines 'on course for higher profits'

06 June 2016 07:41

Global airline profits are expected to rise again

Global airline profits are expected to rise again

Every time a holidaymaker sets foot on a plane an international airline typically makes £7.22 out of them.

This is the share of an average flight ticket that goes to global air firms, according to the industry's trade body.

Iata's latest estimates show that worldwide airline profits will probably see an 11% hike from £24.5 billion last year to £27.3 billion this year. This is £2.1 billion up on its original December 2015 forecast.

Tumbling oil prices plus more plane passengers have forced them to revise their earlier predictions. Such updated figures would bring a fifth successive year of growth.

Why travel insurance is just the ticket

Wherever flyers' ticket money goes, they know that they buy themselves peace of mind if they invest in travel insurance.

This is because it covers them if their flights are delayed, cancelled or abandoned.

Such insurance also protects holidaymakers against lost luggage, stolen property or mislaid documents.

How Iata has arrived at its new forecasts

The trade body reckoned on oil costs being typically 17% lower in 2016 than they were in 2015 and passenger demand to be 6.2% greater.

What the expert says

Tony Tyler, director-general of Iata, described the improvement in profitability as being a "significant achievement" for the aviation sector.

He said: "On average, airlines will make 10.42 US dollars (£7.22) for each passenger carried. In Dublin, that's enough to buy four double-espressos at Starbucks.

"Put another way, for every 100 US dollars (£69) in sales that Starbucks makes, their net profit is over 11 US dollars (£7.62) but airlines will only make 5.60 US dollars (£3.88)."

The expert concluded: "We don't begrudge Starbucks their profitability, but there is clearly still upside for airlines."