Executive Briefings

Fifty Percent Decline in Jet Fuel Propels Airlines to Nearly $40Bn Profit

Famed investor Warren Buffett once warned that investing in airlines was "a death trap." He may be rethinking his view on the airline industry now that the trade group for the world's carriers has predicted that the industry will pocket a record $39.4bn this year.

Alexandre de Juniac, director-general of the International Air Transport Association, told a recent gathering in Singapore that the $39.4bn in net profit for 2016 represents the second year in a row that the industry will generate a return on investment higher than 9 percent.

“It seems that we are living in extraordinary financial times,” he said.

By comparison, the airline industry reported $5bn in combined profit in 2006, with a return on investment of 4.7 percent, according to the IATA.

De Juniac attributed the robust earnings to lower fuel costs and resilient demand from air travelers. Jet fuel prices in the U.S. have dropped more than 50 percent in the last two years.

Read Full Article

Alexandre de Juniac, director-general of the International Air Transport Association, told a recent gathering in Singapore that the $39.4bn in net profit for 2016 represents the second year in a row that the industry will generate a return on investment higher than 9 percent.

“It seems that we are living in extraordinary financial times,” he said.

By comparison, the airline industry reported $5bn in combined profit in 2006, with a return on investment of 4.7 percent, according to the IATA.

De Juniac attributed the robust earnings to lower fuel costs and resilient demand from air travelers. Jet fuel prices in the U.S. have dropped more than 50 percent in the last two years.

Read Full Article