IATA Sees Higher Airline Revenue and Profits In 2018

IATA has forecast higher passenger numbers and revenue for the world’s airlines in 2018, with annual net profits rising to USD$38.4 billion.

Total passenger revenue is forecast to grow to $581 billion, from $532 billion this year as passenger numbers rise to 4.3 billion, from 4.1 billion. Overall revenues are expected at $824 billion, up 9.4 percent on 2017’s $754 billion.

The International Air Transport Association (IATA) said in its forecast that “Strong demand, efficiency and reduced interest payments will help airlines improve net profitability in 2018 despite rising costs.” 2018 is expected to be the fourth consecutive year of sustainable profits.

The net profit figure of $38.4 billion next year is an improvement on the $34.5 million expected for 2017, itself an increase from the previous forecast of $31.4 billion.

Although operating margin is expected to decline 8.1 percent, net margin is expected to improve by 4.7 percent. IATA puts the gain down to strong demand, efficiency and reduced interest payments.

Cargo is also forecast to continue its recovery, with growth of 4.5 percent expected over this year’s total - 62.5 million tonnes against 2017’s 59.9 million tonnes.

“These are good times for the global air transport industry,” IATA’s Director General Alexandre de Juniac said. “More people than ever are travelling [and] the demand for air cargo is at its strongest level in over a decade.”

de Juniac warned, however, of longer-term challenges, saying “many of them are in the hands of governments.

“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 benefits of aviation are compelling, with the industry supporting 2.7 million direct jobs and providing support for 3.5 percent of global economic activity.