Global airlines raised their forecast for 2015 industry profits by more than 17 per cent to US$29.3 billion on Monday, almost doubling from last year and heralding a boom for carriers in North America that stand to reap half the worldwide total.
The International Air Transport Association (IATA), announcing the upgrade during a gathering of 260 member airlines, said lower oil prices were the main factor pushing the industry further into the black. But the windfall could be muted by the rise in the value of the dollar and widespread airline fuel hedging.
“The industry’s profits are far from uniform. Many airlines still face huge challenges,” IATA director general Tony Tyler said in a declaration to the airline lobby’s annual meeting.
IATA had previously forecast a $25bn profit this year.
It said the industry’s average net profit margin would almost double to 4 per cent from last year’s 2.2 per cent. It saw the fuel bill dwindling to $191bn from $226bn in 2014, when airlines made a restated profit of $16.4bn.
At the same time, planes are expected to fly fuller than ever before as the industry continues to match capacity more closely to demand, though some airline bosses meeting in Miami are worried such discipline could start to fray.
“A focus on efficiency is seeing supply matched more closely than ever with demand and is expected to produce a record high load factor of 80.2 per cent,” IATA said, referring to the proportion of seats sold on an average flight.
The forecasts came alongside figures showing that airlines are set for a significant breakthrough in 2015, delivering returns on capital invested in them that exceed the average cost of that capital for the first time in the industry’s history.
Although some airlines generate significant profits when the economy is strong, high costs such as labour and fuel, and intense competition, have given air transport a chronic reputation for destroying value for investors.
This year, the industry, which employs 2.5 million people, is expected to generate $4.9bn of value for investors, helped by restructuring and low interest rates, IATA said.
But it noted that high returns are not widespread outside North America where, unlike many foreign rivals, airlines have felt the full benefit of cheaper fuel denominated in dollars.
An expected 7.5 per cent net profit margin in North America, fuelled by profits of $15.7bn, contrasts with profit margins of 2.5 and 2.8 per cent in Asia and Europe respectively.
Asian carriers are exposed to doldrums in the cargo industry and China’s slowdown, while Europe is hurt by the weaker euro.
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Springtime in a Broken Mirror,
Mario Benedetti, Penguin Modern Classics
Pharaoh's curse
British aristocrat Lord Carnarvon, who funded the expedition to find the Tutankhamun tomb, died in a Cairo hotel four months after the crypt was opened.
He had been in poor health for many years after a car crash, and a mosquito bite made worse by a shaving cut led to blood poisoning and pneumonia.
Reports at the time said Lord Carnarvon suffered from “pain as the inflammation affected the nasal passages and eyes”.
Decades later, scientists contended he had died of aspergillosis after inhaling spores of the fungus aspergillus in the tomb, which can lie dormant for months. The fact several others who entered were also found dead withiin a short time led to the myth of the curse.
The biog
Nickname: Mama Nadia to children, staff and parents
Education: Bachelors degree in English Literature with Social work from UAE University
As a child: Kept sweets on the window sill for workers, set aside money to pay for education of needy families
Holidays: Spends most of her days off at Senses often with her family who describe the centre as part of their life too
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
ABU DHABI ORDER OF PLAY
Starting at 10am:
Daria Kasatkina v Qiang Wang
Veronika Kudermetova v Annet Kontaveit (10)
Maria Sakkari (9) v Anastasia Potapova
Anastasia Pavlyuchenkova v Ons Jabeur (15)
Donna Vekic (16) v Bernarda Pera
Ekaterina Alexandrova v Zarina Diyas
The five pillars of Islam
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What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Russia's Muslim Heartlands
Dominic Rubin, Oxford
