African airlines to post thinnest profit - Iata

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Miami - African airlines are expected to post a collective profit of $100m for a net margin of 0.8% ($1.59 per passenger), the thinnest of all regions,” according to the International Air Transport Industry Association (Iata).

“Although in the black, this continues the relatively poor performance of the African region the past few years,” Iata said at its annual general meeting taking place in Miami.

Last year traffic growth for African airlines was weak because of various problems that disrupted tourism – like the ebola crisis – but market share also continues to be lost.

Currencies have been weak, particularly for oil exporters, so the benefits of lower fuel prices will be limited in Africa, according to Iata.

African airlines are also expected to see the slowest growth among developing markets with capacity and demand expansion of 3.3% and 3.2% respectively this year.

Iata said the global airline industry is expected to make a net profit of $29.3bn in 2015 on expected revenues of $727bn.

“All regions are expected to see an improvement in profitability in 2015, compared to 2014. There was, however, stark differences in regional economies and resultant airline performance.

Over half the global profit is expected to be generated by airlines based in North America.

The main drivers for the airline industry forecast by Iata include fuel prices and the recent decline in fuel prices is seen as a welcome development.

However, the impact of a stronger US dollar has also been seen in the industry.

Passenger business is expected to grow by about 6.7% in 2015 and passenger numbers are expected to top 3.5 billion for the first time in 2015.

The cargo business is expected to grow by 5.5% in 2015, slightly slower than the 5.8% in 2014. Iata said the longer term prospects for air cargo remain challenging with a continuing post-financial crisis trend of slower trade growth relative to gross domestic product.

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