IATA Sees Higher Airline Revenue and Profits In 2018

Global passenger traffic up 7.2pc in Oct: IATA

According to the forecast by the industry's global trade association, combined net profits will hit $38.4 billion, from a revised $34.5 billion in 2017, with United States carriers weighing in with nearly half.

The global airlines' industry is projected to record a higher net profit of $38.4 billion in 2018, primarily bolstered by strong demand, industry grouping IATA said on Tuesday. "And the industry is ready to partner with governments to reinforce the foundations for global connectivity that are vital to modern life".

"Safety performance is solid".

"As expected, the recent severe weather in the Americas region had only a temporary impact on the healthy travel demand we have seen this year, and we remain on course for another year of above-trend growth", said Alexandre de Juniac, IATA's Director General and Chief Executive in the report. "Airlines are achieving sustainable levels of profitability".

Although passenger numbers are on the rise, to hit 4.3 billion next year, with passenger business revenues set to grow 9.2 per cent to $581 billion, IATA warned that rising costs overall, notably on higher fuel prices, will pose the biggest challenge to profitability in 2018.

The price of jet fuel is expected to increase 12.5 per cent from $65.6 in 2017 to $73.8 in 2018.




"Signs pointing to broad-based economic upturn continuing into 2018 is also a good news for air travel demand", he said.

Domestic travel grew 7.2 percent in October, and capacity jumped 6.6 percent. "For Thailand, Indonesia, Myanmar, Cambodia, Laos (and) Malaysia, the airline industry's capacity growth is moderate and we should expect a more favourable earnings outlook for the airlines based in these countries", she said.

Though a rise in the total number of passengers is expected - jumping from 4.1 billion in 2017 to 4.3 billion - the growth in this rise has decreased.

IATA has estimated 2018 airline capacity growth to be 3.4 percent for North America, just shy of the region's forecast traffic growth of 3.5 percent. De Juniac also cited potential government interference in aviation practices as a factor in the coming year. "While restocking cycles are usually short-lived, the growth of e-commerce is expected to support continued momentum in the cargo business beyond the rate of expansion of world trade in 2018", it added.

October global passenger demand rose 7.3% compared to October 2016, which was an improvement compared to the 6.6% demand increase for September. Cargo carried is seen rising to 62.5 million tonnes from 59.9 million tonnes this year.

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