'Hard to imagine better times than these' in aviation
Hawaiian Airlines CE Mark Dunkerley has spent decades in the aviation industry and seen many ups and downs. Asked to describe the current state of the market, he says: "I think it is hard to imagine, in general, better times than these." The oil price may have risen by 67% to around US$50 a barrel from a 12-year low of under US$30 a barrel in January, but compared with the US$145 high reached in 2008 it is still very reasonable. The IATA estimates fuel will represent less than 20% of the global operating cost for airlines for the first time since 2004, based on a forecast average of US$45 a barrel for the year. "Labour costs are probably the biggest cost now for many airlines after fuel prices have fallen," IATA chief economist Brian Pearce said. Industry profits are expected to rise to US$39.4b this year, after having more than doubled to US$35.3b last year, despite predictions the average fare price will fall by 7% as airlines add capacity. "The fact we have had more than a year of above-trend growth must be partly because of the sharp plunge in oil prices," Association of Asia Pacific Airlines director general Andrew Herdman says. "That means that fares have been falling as the benefits have been passed on to customers, but airline margins have improved." There was something of a consensus among the chief executives at the IATA annual meeting in Dublin last week that the oil price remains low in relative terms. Just how much the fuel price would have to creep back up to return to what is deemed "high" is less clear.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2016-06-07/general/hard-to-imagine-better-times-than-these-in-aviation
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'Hard to imagine better times than these' in aviation
Hawaiian Airlines CE Mark Dunkerley has spent decades in the aviation industry and seen many ups and downs. Asked to describe the current state of the market, he says: "I think it is hard to imagine, in general, better times than these." The oil price may have risen by 67% to around US$50 a barrel from a 12-year low of under US$30 a barrel in January, but compared with the US$145 high reached in 2008 it is still very reasonable. The IATA estimates fuel will represent less than 20% of the global operating cost for airlines for the first time since 2004, based on a forecast average of US$45 a barrel for the year. "Labour costs are probably the biggest cost now for many airlines after fuel prices have fallen," IATA chief economist Brian Pearce said. Industry profits are expected to rise to US$39.4b this year, after having more than doubled to US$35.3b last year, despite predictions the average fare price will fall by 7% as airlines add capacity. "The fact we have had more than a year of above-trend growth must be partly because of the sharp plunge in oil prices," Association of Asia Pacific Airlines director general Andrew Herdman says. "That means that fares have been falling as the benefits have been passed on to customers, but airline margins have improved." There was something of a consensus among the chief executives at the IATA annual meeting in Dublin last week that the oil price remains low in relative terms. Just how much the fuel price would have to creep back up to return to what is deemed "high" is less clear.<br/>
