DUBLIN—IATA boosted its 2016 global airline net profit forecast by 8.5% from its December forecast to $39.4 billion, citing lower fuel prices and improving airline efficiency.                                                                       

Speaking to reporters Thursday at IATA’s annual general meeting here, Tony Tyler, IATA’s director general and CEO, said the main difference between the new forecast and the previous projection is that per-barrel oil prices are expected to average $45 for the full year, down from December’s assumption of over $50 per barrel. But Tyler and IATA Chief Economist Brian Pearce were quick to emphasize that industry profitability is not solely a function of low fuel costs. In fact, per barrel oil prices—sitting at just under $50 after falling to as low as $33 earlier this year—are generally trending upwards.

Following the 2008–09 global financial crisis, “Airlines were actually changing the structure of their business, before low fuel prices,” Pearce said. Given that carriers have paid down debt and are more effectively utilizing capital, particularly in North America (from where more than half the 2016 forecast net profit will come), airlines are likely to “deliver a pretty good performance,” even if fuel prices continue to rise, according to Pearce.

“In the last 24 hours, I’ve talked to two airline CEOs, one of a large airline and one of a small airline, and both have said to me, ‘I’m not bothered with fuel prices going up; I’m still going to make money.’ The industry is showing more resilience,” Tyler said.

Pearce described airlines’ financial performance in 2015 and 2016—the only two years ever in which the industry will have produced a positive return on invested capital in aggregate—as “a normalization” of the commercial air-transport business. “This is really airlines looking like other industries,” he explained. “This should be commonplace. It looks exceptional, but it should be commonplace.”

With a net profit margin of 5.6% on an expected aggregate $709 billion in total revenue for 2016, airlines are in the middle of the pack in terms of corporate profitability, Tyler noted. “On average, airlines will make $10.42 [per flight segment] for each passenger carried,” he explained. “In Dublin, that’s enough to buy four double espressos at Starbucks. Looked at from a different angle, Starbucks will earn about $11 for every $100 in sales, while airlines will make $5.60. We don’t begrudge Starbucks their profitability. But there is clearly still upside for airline profits.”

Tyler and Pearce pointed out that airlines’ solid profitability is being achieved despite a tepid global economy. “It’s an impressive performance and the mood of the industry is generally optimistic,” Tyler said.