IATA: With passenger growth will come higher airline profits

Jon Howard
December 6, 2017

The association said global passenger demand rose by 7.3 per cent y-o-y, with airlines in all regions recording traffic growth.

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For cargo volume, the strong growth seen in 2017 was due to unexpectedly strong demand that pushed companies to restock inventories quickly, IATA said.

As a whole, the strength of mainland Chinese and Japanese carriers and the air cargo business would help the region's airlines generate US$9 billion of profit. "And we will see record load factors in 2018. something like 81.4 per cent".

In the Asia-Pacific region, including India, airlines are expected to register profits of $9 billion in 2018, which would be marginally higher than $8.3 billion projected for this year.

Middle East: Middle East carriers are forecast to see net profits improve to $600 million in 2018, up from $300 million in 2017. Europe will provide the biggest increase in net income at a gain of $1.7 billion as travel continues to rebound from a spate of terrorist attacks and trans-Atlantic demand remains strong. Worldwide traffic for North American carriers grew 3.7% during the month (compared to 3% in September) as global capacity in the region grew 5.2%, causing the region's global load factor to slide 1.1 points YOY to 79.2%.

Traffic has been heavily affected by the now-lifted ban on portable electronic devices, as well as from the proposed travel bans to the US. The load factor represents the number of available seats filled. North America was one of just two regions to post a load factor decline.

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IATA said there "continues to be indications" that inbound USA travel is being deterred by the additional security measures now involved when travelling to the country.

Asia-Pacific was followed by Latin American airlines which had traffic growth of 8.7 percent.

On a seasonally-adjusted basis, however, volumes are slightly below where they were three months ago.

Europe added 4.5 percent more capacity in October.

After declining for six years in a row, passenger yields, a measure of ticket pricing, are also expected to rise by 3% next year, after falling 1.5% in 2017.

Africa is set to remain the only unprofitable region, IATA predicts, with airlines suffering a collective $100 million loss in 2018, similar to this year. Airlines saw traffic grow 7.5 percent, capacity 3.4 percent, and load factor increased 2.7 percent.

Domestic travel grew 7.2 percent in October, and capacity jumped 6.6 percent.

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