Hard brexit would be a 'disaster' for UK-based airlines - IATA chief

Global passenger traffic up 7.2pc in Oct: IATA

Global passenger traffic up 7.2pc in Oct: IATA

Driven by a predicted two-fold growth in net profit by Middle East carriers, net profits in the global aviation industry are set to surge by some 11 per cent in 2018, the International Air Transport Association (Iata) said on Tuesday. Capacity in the region was 8.4pc higher, while the load factor was up 1.3 percentage points to 78pc. A strong upcycle in the cargo markets will also support the expected profit improvement next year, it added.

On the other hand, domestic demand climbed 7.2% in October while capacity rose 6.6%.

IATA represents some 275 airlines comprising 83 per cent of global air traffic.

IATA director-general and chief executive officer Alexandre de Juniac said airlines are achieving sustainable levels of profitability, but challenges remain. Average net profit per passenger is also forecast to rise to $8.90, up from $8.45 in 2017.

While cargo demand remains strong, several indicators show that we may have passed the growth peak.

Total capacity climbed by six per cent in the worldwide passenger market segment, while load factor increased one percentage point to 79.4 per cent y-o-y, it said. The price of jet fuel is forecast to jump nearly 13%, weighing on earnings at carriers with limited hedging, such as those in the USA and China. Asia-Pacific carriers are projected to earn $9 billion, Latin American airlines $900 million, and Middle Eastern carriers $600 million. 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 price of jet fuel is expected to increase 12.5 per cent from $65.6 in 2017 to $73.8 in 2018.

Geneva/London: Global airline earnings this year will top previous forecasts and surge to a record in 2018, spurred by higher fares and burgeoning cargo demand, according to the industry's main trade group.

This is especially impressive considering that October was the 38th consecutive month of double-digit passenger percentage growth for India.

Projecting these figures into the future, IATA predicted that China will be the largest aviation market in the world by 2025, with the U.S. in second position and India in third. India's October growth rate was the highest the country has seen all year.

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