The global airlines industry will return to record profit in 2018 on the back of strong travel demand and recovering world economies, besides an expected jump in airfares, the International Air Transport Authority (IATA) said in its financial outlook on Tuesday in Geneva.
Globally, IATA is expecting net profit to rise to hit US$38.4 billion next year, up 11.3% from the US$34.5 billion expected for 2017.
The International Air Transport Association (IATA) has cautioned governments across the world about privatising airports to fund growth, a statement that assumes significance as India plans to upgrade and build airports through private sector participation.
"Demand for air travel remains strong as we head into the holiday travel season and signs point to the broad-based economic upturn continuing into 2018, which is good news", he added. "Airlines are achieving sustainable levels of profitability", said Mr de Juniac. "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", he said.
"The region's carriers face challenges to their business models, and from low oil revenues, regional conflict, crowded air space, the impact of travel restrictions to the U.S., and competition the new "super connector" [Turkish Airlines]", IATA said. Overall revenues are seen rising 9.4% y-o-y to US$824 billion in 2018.
North America: Airlines in this region are forecast to generate the strongest financial performance with net profits of $16.4 billion in 2018, up from $15.6 billion in 2017.More news: Terrorists attack Army convoy in J&K's Qazigund, gun battle now underway
An estimated 4.3bn passengers will travel next year, with air cargo to rise to 62.5m tonnes.
The organisation forecast profit would grow to $600m next year from $300m this year on the back of a minor increase in demand. 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.
Airlines are on course to increase profits again in 2018, a major industry body has said. "This will outpace an expected 3.5 per cent increase in unit revenues", Pearce said.
This is especially impressive considering that October was the 38th consecutive month of double-digit passenger percentage growth for India.
Freight volumes are still expected to grow in 2018, although at a slower pace than in 2017.