Middle East Airlines' Profits to Double in 2018, Says IATA

Global passenger traffic up 7.2pc in Oct: IATA

Global air travel stays on course for more growth

According to a forecast by IATA, global industry's net profit is likely to touch $38.4 billion in 2018 from the $34.5 billion expected net profit in 2017.

To continue to deliver on our full potential, governments need to raise their game-implementing global standards on security, finding a reasonable level of taxation, delivering smarter regulation and building the cost-efficient infrastructure to accommodate growing demand.

"It's still, however, a tough business, and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses", Mr de Juniac noted.

"This year airlines will safely fly 4 billion people and 60 million tonnes of cargo over some 20,000 city pairs".

IATA represents around 275 airlines comprising 83 per cent of global air traffic.

According to Iata, the industry has leveraged on this period of positive cash flow to pay out dividends as well as to pare debt, which has brought down interest payments.

While the demand in the cargo markets remains strong, several indicators show that it may have passed the growth peak.

The average net profit per departing passenger will also rise slightly to $8.90 next year, from $8.45 in 2017.

Asia-Pacific airlines will achieve record levels of profitability next year as strong global economic growth, higher ticket prices and more travellers than ever before boosted carriers' bottom lines, the industry's trade body revealed on Tuesday.

"Passenger market conditions vary across the region". The Middle East should see significant gains, with demand far outstripping capacity growth that's set to be the lowest since 2002 as companies such as Qatar Airways respond to sluggish oil-industry demand and the impact of travel restrictions. The price of jet fuel is forecast to jump nearly 13%, weighing on earnings at carriers with limited hedging, such as those in the USA and China.

With the exception of Singapore Airlines (SIA) - which has hedged 47 per cent of its fuel needs up till FY22-23 - most other South-east Asian carriers have limited or no fuel hedging, she went on to highlight.

The association's chief economist, Brian Pearce, said China had driven a large part of the industry's profits and the country had benefited from a weaker U.S. dollar.

As a whole, the strength of mainland Chinese and Japanese carriers and the air cargo business would help the region's airlines generate US$9 billion of profit. It is based on data provided by IATA member airlines during October 2017. This is putting downward pressure on yields.

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