Graphically Speaking

Flight of Fancy

The global aviation industry is in full flight towards profitability after a crisis-ridden period

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Published 4 years ago on Sep 19, 2016 Read

The global aviation industry has reason to be cheerful. Despite a weak global economy taking a toll on cargo revenue, the industry has managed to grow its revenue at a healthy clip since the crisis-riddled period of 2009 from $476 billion to $718 bilion in 2015. But, more importantly, profitability has shown a phenomenal jump to $35 billion in 2015 against a loss of $4.6 billion in 2009, according to industry body IATA. A large part of the bottom-line improvement has come from the over 80% fall in the price of crude oil, resulting in lower aviation turbine fuel cost. Aggressive ticket pricing led to a higher jump in passengers criss-crossing the globe, helping airlines worldover to grow revenues and stay profitable. As a result, the average return on invested capital for airlines, rose above the cost of capital for the first time, at over 9% in 2015 and is expected to continue in the current year as well. With IATA predicting consumers to spend 1% of world GDP on air transport, the party in the sky seems to have just begun.