Airlines in India face infrastructure difficulties: IATA

A global airlines' association on Thursday said that air passenger carriers in India face infrastructure and cost difficulties which are holding back the improvement in financial performance.

According to the International Air Transport Association (IATA), airlines in Asia-Pacific region are expected to post a $7.8 billion profit in 2016, up from $7.2 billion in 2015.

"Capacity is forecast to expand by 9.1 per cent in 2016, ahead of demand which is likely to grow by 8.5 per cent. Asia-Pacific carriers have a 40 per cent share of global air cargo markets," IATA was quoted in a statement which was released at its 72nd annual general meeting (AGM) and world air transport summit being held in Dublin.

"As a result they continue to feel the brunt of stagnation in this sector, which is holding back the improvement in financial performance. Challenges include intense competition as the budget sector expands, restructuring in the Chinese economy and continuing infrastructure and cost difficulties in the Indian market."

IATA revised its 2016 financial outlook for global air transport industry profits to $39.4 billion from $36.3 billion forecast in December 2015.

IATA said that it expects 2016 to be the fifth consecutive year of improving aggregate industry profits.

"Lower oil prices are certainly helping -- though tempered by hedging and exchange rates," said Tony Tyler, IATA Director General and Chief Executive.

"In fact, we are probably nearing the peak of the positive stimulus from lower prices."

In 2015, the industry generated a global aggregate profit of $35.3 billion.

--IANS

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