Global airlines' industry net to hit $38.4 bn in 2018: IATA

07 December, 2017, 02:03 | Author: Valerie Burke
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Overall profits for global airlines are set to rise 11 percent to $38.4 billion in 2018, with $27.9 billion coming from North American and European airlines, according to new figures released by International Air Transport Association (IATA).

"These are good times for the global air transport industry".

"Safety performance is solid".

IATA Director General/Chief Executive Officer, Alexandre de Juniac, said demand for air travel remained strong ahead of the holiday travel season. "It's still, however, a tough business and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses", he told a media briefing here yesterday. Capacity grew 6.2 per cent and load factor climbed 0.8 percentage points to 80.8 per cent, which was a record for the month.

Operationally, the industry is forecast to see 4.3 billion passengers worldwide in 2018, up 6% from 4.1 billion in 2017.

Strong demand, efficiency and reduced interest payments will help airlines improve net profitability in 2018 despite rising costs, de Juniac said.

Passenger numbers are expected to rise to 4.3 billion, up from 2017's 4.1 billion.

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Airlines and cargo companies also see opportunities from commercial drones, Celine Hourcade, head of cargo transformation at IATA said. The association expects oil prices to average $60 for a barrel of Brent Crude - a rise of 10.7%t on this year, taking oil-related costs up from 18.8% to 20.5%.

The Middle Eastern carriers are poised to double profits to US$600 million next year due to a 7 per cent growth in demand and a scaling back of capacity injection.

"North American airlines have generated more than half of the industry's profits produced in the past three years, but rising cost pressures have slowed further improvements", the report said.

"On the other hand, the airline capacity growth in the other Asean markets is more aggressive, namely Singapore, Vietnam, the Philippines and Brunei".

De Juniac added that it was vital for governments to support the growing airline industry as it faces longer term challenges.

Total capacity climbed by six per cent in the global passenger market segment, while load factor increased one percentage point to 79.4 per cent y-o-y, it said.

"By bringing together people of different backgrounds and cultures to do business, to learn from one another and to solve problems, aviation provides enormous value beyond what can be calculated".

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