Strong airline profitability is expected to continue in 2018, according to IATA’s latest financial forecast.
IATA forecasts global industry net profit to rise to $38.4 billion in 2018, an improvement from the $34.5 billion expected in 2017.
Strong demand, efficiency, and reduced interest payments will facilitate this rise in net profits—despite rising costs.
The number of air passengers will rise from 4.1 billion in 2017 to 4.3 billion next year
Overall, revenues are expected to rise to $824 billion, up from 2017 revenues of $754 billion.
Cargo demand is also expected to grow, with the amount of cargo carried predicted to rise to 62.5 million tons–up from 59.9 million in 2017.
Meanwhile, the number of air passengers will rise from 4.1 billion in 2017 to 4.3 billion next year. Average net profit per passenger is also forecast to rise to $8.90, up from $8.45 in 2017.
Regionally, North American airlines should perform best in 2018, and are forecast to generate net profits of $16.4 billion (up from $15.6 billion in 2017).
African airlines will likely post the weakest performance, and are forecast to make a $100 million loss in total.
It’s still, however, a tough business, and we are being challenged on the cost front
Commenting on the forecast, IATA’s Director General and CEO Alexandre de Juniac said the air transport industry was experiencing "good times", but he highlighted the many challenges airlines face to remain profitable.
“More people than ever are traveling,” he said. “More routes are being opened. Airlines are achieving sustainable levels of profitability.
“It’s still, however, a tough business, and we are being challenged on the cost front by rising fuel, labor and infrastructure expenses.”