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Global passenger traffic up 7.2pc in Oct: IATA

Global passenger traffic up 7.2pc in Oct: IATA

Airlines in Asia-Pacific are expected to see profits rise 8.4% year-on-year (y-o-y) to US$9 billion in 2018 from an expected US$8.3 billion this year as demand growth outpaces capacity increases, says the International Air Transport Association (IATA).

All regions are expected to post improved profits year-on-year in 2018 with the North American carriers leading the pack at US$16.4 billion, which is almost half of the collective bottom line.

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.

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

"Safety performance is solid".

"To be blunt, we have not seen an airport privatisation that has fully lived up to expectations", said Alexandre de Juniac, director general & CEO at IATA.

"It's still, however, a tough business, and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses", Mr de Juniac noted.

De Juniac added that it was vital for governments to support the growing airline industry as it faces longer term challenges.

"Aviation is the business of freedom and a catalyst for growth and development".

The region's carriers face challenges to their business models, Iata said, and from low oil revenues, regional conflict, crowded air space, the impact of travel restrictions to the U.S., and competition from the new "super connector" [Turkish Airlines]. Meanwhile, airlines in the Asia-Pacific region witnessed an increase in freight volumes by 4.4 percent, and the capacity expanded by 3.9 percent in October 2017, compared to the same period a year ago.

All major regions are expected to contribute, led by Europe and the U.S. More cargo is being sent by air as people increasingly buy goods over the Internet-giving a particular lift to Asian exports.

"The focus is really on the pressure from cost (increases)", said Pearce.

An estimated 4.3bn passengers will travel next year, with air cargo to rise to 62.5m tonnes.

In Europe, capacity increased 4.5pc year-on-year in October, while the overall load factor was 1.3 percentage points higher at 84.9pc.

The Middle Eastern carriers are poised to double profits to US$600 million next year due to a 7 per cent growth in demand and a scaling back of capacity injection.

Passenger numbers are expected to increase to 4.3 billion in 2018. It now expects profits of US$34.5 billion for this year vis-a-vis the US$31.4 billion announced in June.

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