The airline industry is on course for record profit in 2018

Randall Padilla
December 7, 2017

Though a rise in the total number of passengers is expected - jumping from 4.1 billion in 2017 to 4.3 billion - the growth in this rise has decreased.

Over the past year, IATA statistics showed that airlines in India recorded an increase in passenger traffic of just over twenty percent.

"More people than ever are traveling", he said.

That's according to research by IATA, the International Air Transport Association. It now expects profits of US$34.5 billion for this year vis-a-vis the US$31.4 billion announced in June.

IATA said the forecast increase in passenger fares was in line with expected inflation.

Operationally, the industry is forecast to see 4.3 billion passengers worldwide in 2018, up 6% from 4.1 billion in 2017.

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

"Demand for air freight grew by 5.9% in October".

European airlines generate the second-most revenue when compared by region and made $9.8 billion in net profits this year.

Airlines in North America generate almost half of airline revenue across the globe and the largest net profit with $15.6 billion this year. "Airlines are achieving sustainable levels of profitability", added de Juniac, while highlighting the challenges of rising fuel costs and well as labour and infrastructure expenses.

While there will be growth in passenger and cargo demand, Iata's chief economist Brian Pearce warned that intense competition will continue to put pressure on passenger yields. "Many of them are in the hands of governments".

"The industry also faces longer-term challenges", de Juniac acknowledged.

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".

"By bringing together people of different backgrounds and cultures to do business, to learn from one another and to solve problems, aviation provides enormous value beyond what can be calculated".

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.

In response to the tougher conditions regional carriers have cut costs and unprofitable routes, with Dubai carrier Emirates reporting a 111 per cent increase in profit to $214m in the April 1 to September 30 period after a 75 per cent slump in the first half of its previous fiscal year.

Other reports by AllAboutTopnews

Discuss This Article

FOLLOW OUR NEWSPAPER