Air fare spend ‘worth 1% of world GDP’
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Spend on air tickets around the world makes up to 1% of the world’s GDP with the passenger count expected to exceed 3.3 billion this year.
These were findings revealed by IATA in its Economic Performance of the Airline Industry report unveiled at the association’s AGM yesterday.
Global spend on air travel is set to reach US$746 billion this year with fares expected to fall 3.5% after inflation.
The report found that as a result the industry will generate US$621 billion in tourism spend, while the industry’s own profit is expected to increase to US$18bn from the US$10.6bn posted last year.
Taxes will place a heavier burden reaching US$121bn, up from US$113m in 2013.
“Airlines themselves remain burdened with high taxes and weak profitability. With a net profit margin of just 2.4%, airlines will retain only $5.42 per passenger carried. There is a mismatch between the value that the industry contributes to economies and the rewards that generates for those who risk their capital to finance the industry,” added Tony Tyler, IATA’s director general and CEO. “Governments should understand that the real value of aviation is the global connectivity it provides and the growth and development it stimulates, not the tax receipts that can be extracted from it.”
European airlines are expected to see a net profit of US$2.8 billion this year, with carriers in the US and Asia Pacific region posting higher.
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