IATA sees better airline profits in 2018 despite rising costs

Global passenger traffic up 7.2pc in Oct: IATA

US airlines to scoop almost half of global profit in 2018

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

The International Air Transport Association (IATA) has cautioned governments across the world about privatising airports to fund growth, a statement that assumes significance as India plans to upgrade and build airports through private sector participation. "This led cargo volume to grow at twice the pace of the expansion in world trade (4.3%)", said IATA.

Airlines are on course to increase profits again in 2018, a major industry body has said. "More routes are being opened", he told the IATA global media conference in Geneva, Switzerland.

In October, domestic air traffic in India grew by 20.4 percent, while it grew by 10 percent in China, 7.7 percent in Brazil, 6.1 percent in Russian Federation, 5.3 percent in the USA, 2.8 percent in Australia, and 2.3 percent in Japan.

Over the previous year, IATA statistics showed that airlines in India recorded an increase in passenger traffic of just over twenty percent.

Meanwhile, the number of air passengers will rise from 4.1 billion in 2017 to 4.3 billion next year.

Iata forecast a rise in overall revenues to $824 billion, up 9.4 per cent on 2017 revenues of $754 billion.

"Broadly speaking, South-east Asian airlines' operating profits and profit margins are expected to be lower year on year in 2018, if fuel prices remain at current levels or rise further", said Corrine Png, chief executive of transport research firm Crucial Perspective. "Airlines are achieving sustainable levels of profitability".

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.

"The industry also faces longer-term challenges".

IATA said the biggest challenge to profitability in 2018 would be rising costs linked to the higher oil prices and other factors.

"By bringing together people of different backgrounds and cultures to do business, to learn from one another and to solve problems, aviation provides enormous value beyond what can be calculated".

He said: "To continue to deliver on our full potential, governments need to raise their game-implementing global standards on security, finding a reasonable level of taxation, delivering smarter regulation and building the cost-efficient infrastructure to accommodate growing demand". The benefits of aviation are compelling-2.7 million direct jobs and critical support for 3.5 per cent of global economic activity.

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.

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