Paush - National Upliftment Monthly

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26 National Upliftment Monthly Year : 1, Issue : 4
Year : 1, Issue : 4 National Upliftment Monthly 27 Najir Husain Airlines Business is the business of freedom. The safe and efficient global movement of goods and people is a positive force in the aviation world. Aviation’s success betters people's lives by creating economic opportunity and supporting global understanding. It must stand firm in the face of any rhetoric that would put limits on aviation’s future success. Record profits for airlines means earning more than the 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 reengineering the business the industry is also more resilient. 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%). According to IATA’s Director General and CEO, Alexandre de Juniac, Airlines continue to deliver strong results. This year it's expected a record net profit of $35.6 billion. Even though conditions in 2017 will be more difficult with Airlines AIRLINES INDUSTRY IN 2017 rising oil prices, it 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 it face. Indeed, risks are abundant— political, economic and security among them. And controlling costs is still a constant battle in our hyper-competitive industry. Despite facing several constraints, Nepal’s aviation sector, particularly the international sector, has been growing at a healthy rate. Increased movement of migrant workers in search of job overseas, tourist inflow as well as large number of Nepalese students heading abroad for studies has helped generate the robust passenger traffic growth over a decade. The travel demand to Nepal is likely to continue over the next 20 years, according to a study conducted by Airbus. In its latest report on Nepal Air Traffic Analysis, Airbus has said international passenger traffic in Nepal is expected to grow at the rate of 6.4 percent annually over 20 years (2014-34) due to increased travel demand in the Middle East, Europe, Australia, Japan and the US markets. The Airbus forecast that 50 new passenger aircraft will be required to serve the Nepal market by 2024. The report said that international passenger traffic had tripled over the last 10 years. Foreign carriers connecting Nepal recorded a double-digit growth. This marks the 14th consecutive years of growth for international airlines since 2003. Currently, more than 25 international airlines connect the TIA to international destinations. A majority of these international airlines operate double daily flights from Nepal. As unemployment is a growing problem in Nepal, the number of Nepali migrants has been steadily increasing over the past two decades, with the largest spike in out migration. The number has more than doubled in 2016. More than 500,000 youths have been entering Nepal’s labour market every year. The growth in migrant workers movement in fact has attracted a large number of foreign carriers to Nepal from the Middle East. Although, the country is likely to see less tourist arrivals for at least two years, migrant workers movement is likely to jump significantly due to slower economic growth and less job opportunities in the country in the aftermath of the April 25 earthquake. (The author is executive Director of Flytech International, najir786@hotmail.com)
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Paush - National Upliftment Monthly

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