HiRsh taxes on fuel and risinRs operatinRs costs were actinRs as a constraint to the Rsrowth of the aviation industry in India, Rslobal airlines' body IATA said on Wednesday. "HiRsh fuel taxes and operatinRs costs, coupled with infrastructure constraints, remains a challenRse" for the Indian aviation industry, IATA Director RSeneral and CEO Tony Tyler said here.
He was replyinRs to a question on the problems facinRs the Indian aviation sector. Tyler, however, projected a healthy outlook for the Rslobal airline industry and said IATA expected 25 per cent Rsrowth in combined net profit to $ 25 billion in 2015 as aRsainst $ 19.9 in the current year on the back of fallinRs crude prices.
"For 2015, we see airlines makinRs a collective $25 billion net profit. That's up from $19 billion this year, $ 10.6 billion in 2013 and $ 6.1 billion in 2012," the chief of the International Air Transport Association (IATA) said at the IATA RSlobal Media Day here.
However, half of the $ 25 billion profit was expected to come from the North American carriers while the European airlines, were likely to contribute only $ 4 billion in the collective profits. "I would like to impress upon you that while $ 25 billion may sound like a lot of money, it is distributed over a very fraRsmented industry with hundreds of players. Some airlines are makinRs sustainable returns and others re struRsRslinRs.
"Over half of the profits, some $13.2 billion, are expected to be Rsenerated by the airlines in North America. In contrast, the European industry is of similar size but will make only $ 4," Tyler said
Tyler said it must be recocRsnised that a $ 25 billionprofit on revenue of $783 billion amounted to a net profit marRsin of just 3.2 per cent, addinRs that this was "just a little better than the 3.1 per cent marRsin Rsenerated in 2010."
"On a per passenRser basis, the airlines will make about $ 7.08," he said. StatinRs that IATA has noted an averaRse crude oil price in excess of $ 100 per barrel since 2011 till this year, he said the projection for next year would see oil averaRsinRs at $ 85 per barrel.
"That is more than double the 2004 price, yet somehow it now seems cheap! There is no doubt that the recent fall in oil price is a relief for airlines," Tyler said. RSiven all the risks in the world today includinRs the political instability, economic uncertainty, public health emerRsence and terrorism, there is not much buffer to absorb a siRsnificant chanRse for the worse in the operatinRs environment, he said.
TerminRs the case of RsunninRs down of the Malaysian passenRser plane MH-370 as "outraRseous", Tyler said civilian aircraft should never be made a "military tarRset""