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Analysis on ensuring financial sustainability of the industry and an appropriate return for investors.


Profitability and the Air Transport Value Chain
This study updates earlier research on profitability across the air transport supply and distribution chain.  It shows airlines generate returns on capital of 4.1% during 2004-2011, far below the industry’s cost of capital and possibly too low to attract the capital needed in coming decades.
Full report (pdf)

Value Chain Profitability
The airline industry has been unable to generate sufficient returns for existing investors. Unless invested capital is used more effectively - and returns improved - future investment will either be constrained or delivered inefficiently or both.
Summary report (pdf)
Full report (pdf)

Vision 2050: Shaping the Industry's Future 
Output from the IATA initiative to envision how the air transport industry can serve the needs of the customer of the future in an environmentally and financially sustainable manner.
Full report (pdf)

Profitability: Does Size Matter?
Last year eight airlines made operating profits over $500m, three earning more than $1bn. However, there is no correlation of size with profit margins and only a slight link with operating profits.
Full report (pdf)

Explaining over-capacity in the airline industry
by Oliver Wojahn
The airline industry has suffered from insufficient profitability for many years, and since 2000, it has failed to cover its cost of capital. These results, however, appear to be somewhat incompatible with another feature of the industry - the continuous growth in airline capacity. Oliver Wojahn provides his analysis of some of the reasons behind why capital markets and managers have supported capacity expansion. 
Full report (pdf)

Airline profitability; US versus the rest
US airlines generated all of the $42 billion of net losses suffered by the global airline industry during 2001-2005. But it's not just a US problem. Even the profits made outside the US were insufficient to pay investors a 'normal' return on capital.
Full report (pdf)

Airline Profits 2008
Analysis of the 2008 results for 233 major airlines shows that record fuel prices and the impact of the great recession hit profitability across scale and business model.
Full report (pdf)
Airline Profitability 2006
Analysis of changes in airline operating profitability over the last year and ranking of top 30 most profitable airlines.
Full briefing (pdf)
Does the S-Curve still exist?
by Urs Binggeli and Lucio Pompeo, McKinsey & Company
The S-Curve effect is the phenomenon by which airlines that have a high share of frequencies on a route can attain disproportionately high market shares. With the S-Curve in mind, network managers have historically looked to build a dominant frequency position on certain routes to capture a high share of traffic and revenues. But with significant changes in the airline industry structure in recent years, does the S-Curve still exist?
Complete report (pdf)



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