As passenger numbers grow and profits increase worldwide, the aviation industry believes Colombian airlines might offer lofty returns, though there may be some turbulence ahead.
Commercial airlines posted record worldwide profits in 2016, suggesting the traditionally volatile aviation industry could be an attractive proposition for investors. According to the International Air Transport Association (IATA) 2017 Annual Review, last year the industry made a net profit of USD$34.8 billion on revenues of USD$705 billion and a return on invested capital of 9.9%
Even Warren Buffett, who famously called the airline industry a "death trap for investor" in 2013, has changed his tune.
The IATA report, published on June 2, shows significant regional variations with numbers driven by strong performances in North America, Europe and Asia-Pacific, while Latin American carriers generated only just did better than breaking even. However, it adds that "Latin American airlines are starting to see a turnaround in what has been their otherwise harsh environment recently."
Our favourite airspace, Colombia, is registering rapid growth, with soaring tourism numbers and increasing air capacity. In 2016, not only did 5.1 million tourists visit Colombia "“ an increase of 14% on the year before "“ but there were a total of 35.7 million passenger journeys. There are now 27 international airlines serving the country, seven of which have joined in the past five years. The country also boasts 80 international routes, up from 68 in 2011. Colombia"™s three largest airlines posted increased Q1 operating incomes for 2017…