IATA expects 3.8 bln world airline passengers in 2016

The International Air Transport Association (IATA) announced Thursday that the total airline passenger numbers are expected to rise to 3.8 billion traveling over some 54,000 routes in 2016.

The association made public its airline industry outlook for 2016 during a press conference in Geneva, which sees an average net profit margin of 5.1 percent being generated with total net profits of 36.3 billion U.S. dollars.

IATA also announced a revision to its airline industry outlook for 2015 upwards to a net profit of 33 billion dollars from 29.3 billion dollars forecast in June.

Lower oil prices, strong demand for passenger travel and stronger economic performance in some key economies are the essential factors that drive to the strengthening industry performance conclusion, according to IATA.

"This is an historic achievement for an industry that has been notorious for destroying capital throughout its history... this is coming as expectations build that we are nearing the top of the business cycle," said Tony Tyler, IATA's Director General and CEO.

The IATA noted that the airline industry's performance varies dramatically by region, with North American carriers leading the industry's performance and are expected to generate considerably more than half the industry's total profits in both 2015 and 2016. This is as a result of a strong U.S. economy, the appreciating U.S. dollar, lower oil prices and a restructured industry, estimated the IATA.

While lower fuel costs, a faster than expected recovery of the European economy and strong performance on business travel on North Atlantic routes is benefiting the region of Europe, the Asia-Pacific region's carriers will benefit more fully from the impact of lower fuel prices in 2016 as hedges unwind.

The IATA represents some 260 airlines comprising 83 percent of global air traffic. Endit