Profits of Airline Companies Will Grow by 10% in 2016

Northwest_Airlines_A320_upon_takeoff_at_San_Jose_International_Airport

Another year is now coming to an end. Will any important changes happen in the global tourism industry the next year? Will airline transport costs increase or decrease in 2016? Obviously, a lot of travelers want to find the answers to these interesting questions. Let’s analyze the situation with airline transport costs now and try to make predictions for the next year.

As it is expected, airline companies will increase their profits by approximately 10% the next year. How can this situation be explained? In fact, there are two main factors which are expected to have a huge impact on the profits of companies which operate in airline transport industry. It is important to say that fuel prices have been decreasing for a long period of time. So, most likely they will continue to drop the next year. On the other hand, the demand for travel is growing globally. The data of recent analysis from International Air Transport Association (IATA) show that the number of airline passengers has grown to 3.6 billion in 2015 and is likely to grow to 3.8 billion in 2016. So, it’s likely that airline companies will not decrease ticket prices significantly in the near future. Airline companies will increase their profits by about 10% the next year, according to the data provided by IATA.

The data show that airline industry delivered a net profit of $17.3 billion in 2014. However, the situation has vastly changed since the moment oil prices began to decrease. As it has been estimated, the profits of airline industry will reach $33 billion and $36.3 billion in 2015 and 2016 respectively. IATA Director General, Tony Tyler, has recently commented the situation and made some kind of prediction for 2016. He notes that airline companies will deliver 8.3% this year and 8.6% the next year. About $750 billion will be spent on air transport the next year.

Without a doubt, this piece of news is very important to investors who are going to put their money in airline industry in the future. Airline industry will remain to be a wonderful investment opportunity the next year.

Leave a Reply

Your email address will not be published. Required fields are marked *