The global airline industry is expected to make a net profit of $29.8 billion this year. On forecast total revenues of $736 billion, that represents a 4.1% net profit margin. This marks the third consecutive year in which airlines will make a return on invested capital (7.9%) that is above the weighted average cost of capital (6.9%).
Asia Pacific airlines are expected to generate a net profit of $6.3 billion in 2017 for a net margin of 2.9%, the second highest among the regions. On a per passenger basis, average profits are anticipated to be $4.44. Capacity will grow by 7.6%, ahead of the projected growth in demand of 7.0%. Improved cargo performance is expected to offset rising fuel prices for many of the region's airlines. The expansion of new model airlines and progressive liberalization in Asia Pacific will intensify the already strong competition. There is significant variance in profitability across the region.
More details of the airline industry's outlook for 2017.