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

Global passenger traffic up 7.2pc in Oct: IATA

Led by USA 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.

Airlines and cargo companies also see opportunities from commercial drones, Celine Hourcade, head of cargo transformation at IATA said. Profits are expected to grow by more than $2 billion in 2018, up to $11.5 billion. Demand to and from North America fell in year-on-year terms for the seventh consecutive month in September (the most recent month for which route-specific figures are available) and it remains the only worldwide market not to have grown in annual terms this year.

Domestic demand climbed 7.2% in October compared to October 2016, while capacity rose 6.6%. Passenger traffic (revenue passenger kilometers or RPKs) is expected to rise 6.0 per cent (slightly down on the 7.5 per cent growth of 2017 but still ahead of the average of the past 10-20 years of 5.5 per cent), which will exceed a capacity expansion (available seat kilometers or ASKs) of 5.7 per cent.

The growth in passenger numbers for SA (international and domestic) was expected to be between 3% and 4% a year for the next five years, according to projections by Airlines Association of Southern Africa.

Despite the rise in passenger and cargo numbers, the rate of growth for both will be lower in 2018 then 2017, IATA said.

This has seen airlines achieve "sustainable levels of profitability", de Juniac said.

Despite rising costs, things are looking up for the airline industry.

The organisation forecast profit would grow to $600m next year from $300m this year on the back of a minor increase in demand.

While IATA expects improved profitability across all regions, North America will continue to lead the way, generating net gains of $16.4 billion. "Many of them are in the hands of governments".

"The industry also faces longer-term challenges".

He said: "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".

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.

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