Airlines are expected to achieve a collective net profit of $33.8 billion on revenues of $834 billion in 2018, a net margin of 4.1%.
This is despite rising costs, including fuel, labor, and interest rates. Overall unit costs are forecast to rise 5.2% this year, after a 1.2% increase in 2017; a significant acceleration.
Indeed, profits at the operating level, though still high by past standards, have been trending slowly downwards since early 2016 as a result of accelerating costs.
“The industry’s financial foundations are strong, with a nine-year run in the black that began in 2010,” said Alexandre de Juniac, IATA’s Director General and CEO.
“And the return on invested capital will exceed the cost of capital for a fourth consecutive year. At long last, normal profits are becoming normal for airlines. This enables airlines to fund growth, expand employment, strengthen balance sheets and reward our investors.”
Aviation spreads prosperity and enriches the human spirit. That truth lays the foundation for a very important message. The world is better off when borders are open to people and to trade
In 2018, the return on invested capital is expected to be 8.5%.
“Aviation spreads prosperity and enriches the human spirit,” said de Juniac. “That truth lays the foundation for a very important message. The world is better off when borders are open to people and to trade. And our hard work as an industry has primed aviation to be an even stronger catalyst for an ever more inclusive globalization.
“The 4.1 billion passengers who boarded planes in 2017 demonstrated the human desire to explore, connect, learn and collaborate across great distances,” he added.
“And the over 60 million tonnes of cargo delivered by air accounted for a third of the value of goods traded globally. Every day, goods, people, investment and ideas are connected using aviation’s network. That directly supports 63 million jobs and improves the quality of life for all.”