Led by United States airlines, net profits in the aviation industry are set to rise by some 11 per cent in 2018, the International Air Transport Association (IATA) said yesterday as it presented economic forecasts for the industry. "And the industry is ready to partner with governments to reinforce the foundations for global connectivity that are vital to modern life". "Despite the challenges, there is positive momentum heading into 2018", said Iata, whose 280 members account for more than three quarters of global air traffic. A strong upcycle in the cargo markets will also support the expected profit improvement next year, it added. "More routes are being opened".
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. Passengers have directly contributed to the growth in profit, as the average net profit per departing passenger is expected to rise to $8.90 (up from $8.45 in 2017). The rise in expected passengers from 2017 represents a growth of six per cent, whereas in the number of passengers in 2017 enjoyed a 7.5-per-cent increase on 2016's numbers.
All regions are expected to post improved profits year-on-year in 2018 with the North American carriers leading the pack at US$16.4 billion, which is almost half of the collective bottom line.
And the IATA said growth is expected to continue in 2018 by almost $1 billion to $16.4 billion.
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"Airlines are achieving sustainable levels of profitability", he said while highlighting the challenges of rising fuel costs and well as labour and infrastructure expenses.
Despite rising costs, things are looking up for the airline industry.
Rising ticket revenues have helped major European airlines report better than expected profits this year, and IATA said it was upgrading its net profit forecast for Europe to $9.8 billion this year, from a previous estimate of $8.6 billion, and profits should rise further to $11.5 billion next year.
"The industry also faces longer-term challenges". "Many of them are in the hands of governments". It is also an announcement of global passenger traffic results for October showing that demand (measured in revenue passenger kilometres or RPKs) rose 7.2 per cent, compared to the same month past year. Aviation is the business of freedom and a catalyst for growth and development.