IATA sees better airline profits in 2018 despite rising costs

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The industry will see net profits rising 11.3 per cent to $38.4 billion (Dh141.04 billion) in 2018, marking slight improvement from the $34.5 billion it will make this year (revised up from the $31.4 billion forecast in June).

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.

While the momentum may moderate in 2018, e-commerce will likely help underpin global cargo growth.

Latin America: Airlines in Latin America are forecast to generate a $900 million net profit in 2018, up from $700 million in 2017.

"These are good times for the global air transport industry". With oil prices trending higher, jet fuel prices are expected to rise by 12.5 per cent to US$73.8 per barrel next year.

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. Volumes are expected to grow by 4.5 per cent in 2018, down from the 9.3 per cent growth of 2017. Capacity grew 9.1 percent, but load factor decreased.3 percent.

Global demand rose 7.2 percent in October, measured against the same month a year ago, after hurricanes in the Caribbean and southern United States had pegged back demand in September. This was down from $1.1bn in 2016. Cargo yields are expected to improve by 4 per cent in 2018, slower than the 5 per cent in 2017.

Over the same period, airline service costs for consumers have fallen from US$0.86 per one tonne kilometre to US$0.80, a 7% decline over two decades according to IATA.

Capacity increased 4.5% and load factor rose 1.3 percentage points to 84.9%, highest among regions.

The Asia Pacific region saw the biggest demand growth, with a 10.1 percent increase. Cargo revenues will continue to do well in 2018, reaching $59.2bn, up 8.6 per cent from expected 2017 revenues of $54.5bn.

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

The number of incidents involving disorderly passengers has risen in recent years, with IATA saying in the past that airlines are increasingly having to navigate local laws to bring prosecutions for offenses and crews have to be trained on how to handle violence.

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