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ATAC Announces Staff Changes

December 15, 2016. ATAC President and CEO, John McKenna, announces changes in personnel responsibilities following Mike Skrobica’s retirement at the end of December.

As of January 1, 2017, Wayne Gouveia, will be moving from his current responsibilities of Flight Training to Aviation Security, Airports, Facilitation, and Cargo. He will continue to manage the Dangerous Goods issues. Wayne’s new title will be Senior Vice President.

Bernard Champagne, whose appointment was announced on September 30, and who officially joined the ATAC ranks as Vice President on November 28th, will be taking over Flight Training, Legal and Tax Issues.

The responsibilities of the Executive Vice President, Les Aalders, continue to include all Flight and Technical Operations issues including Safety.

We look forward to continue serving ATAC Members with a renewed team of highly dedicated and highly competent professionals.

Another Strong Year for Airline Profits in 2017

Geneva - The International Air Transport Association (IATA) announced that it expects the global airline industry to make a net profit in 2017 of $29.8 billion. On forecast total revenues of $736 billion, that represents a 4.1% net profit margin. This will be the third consecutive year (and the third year in the industry’s history) in which airlines will make a return on invested capital (7.9%) which is above the weighted average cost of capital (6.9%).

IATA revised slightly downward its outlook for 2016 airline industry profitability to $35.6 billion (from the June projection of $39.4 billion) owing to slower global GDP growth and rising costs. This will still be the highest absolute profit generated by the airline industry and the highest net profit margin (5.1%).

"Airlines continue to deliver strong results. This year we expect a record net profit of $35.6 billion.  Even though conditions in 2017 will be more difficult with rising oil prices, we see the industry earning $29.8 billion. That’s a very soft landing and safely in profitable territory. These three years are the best performance in the industry’s history—irrespective of the many uncertainties we face. Indeed, risks are abundant— political, economic and security among them. And controlling costs is still a constant battle in our hyper-competitive industry," said Alexandre de Juniac, IATA’s Director General and CEO.

"We need to put this into perspective. Record profits for airlines means earning more than our cost of capital. For most other businesses that would be considered a normal level of return to investors. But three years of sustainable profits is a first for the airline industry. And after many years of hard work in restructuring and re-engineering the business the industry is also more resilient. We should also recognize that profits are not evenly spread with the strongest performance concentrated in North America," said de Juniac.

Full Report

Read Alexandre de Juniac's Speech

IATA Economic Performance of the Airline Industry

Interview with Brian Pearce on the 2017 IATA Industry Outlook (video)

Overview of the 2017 IATA Airline Industry Economic Performance (video)

Airline Industry Economic Performance - End year December 2016

Airline industry forecast to generate 7.9% return on invested capital 2017

Key Points:

  • Consumers benefit from lower real travel costs, more routes, and will spend 0.9% of world GDP on air transport in 2017.
  • Economic development is a big winner from the doubling of city pairs and halving of air transport costs over the past 20 years.
  • Governments gain substantially from $123bn of tax next year and from over 69 million 'supply chain' jobs.
  • Load factors are forecast to slip a little as demand slows faster than capacity, and breakeven rises as unit costs start to rise.
  • Equity owners see further gains in 2017; industry ROIC falls from record 2016 levels, but remains above the cost of capital.
  • Credit metrics in 2017 not quite as good as 2016, but free cash flow yield remains positive and balance sheet metrics are stable.
  • Jobs in the industry should reach 2.67 million, productivity improves by 2.8% and GVA/employee is over $100,000.
  • Infrastructure use costs are high, plus inefficiencies in Europe alone add €2.8bn to airline costs next year.
  • N American airlines perform best with a forecast 8.5% net post-tax profit margin in 2017. Africa is the weakest with a 5.7% loss.

To read the report in web version click here

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