IATA reveals 2018 financial forecast

IATA Director General Alexandre de Juniac speaks during the Global Media Day in Geneva

In terms of air freight, cargo volumes are similarly expected to rise at a slower pace than this year, down from 9.3 per cent in 2017 to 4.5 per cent in 2018, to reach 62.5 million tonnes. Capacity grew 6.2 per cent and load factor climbed 0.8 percentage points to 80.8 per cent, which was a record for the month. "For Thailand, Indonesia, Myanmar, Cambodia, Laos (and) Malaysia, the airline industry's capacity growth is moderate and we should expect a more favourable earnings outlook for the airlines based in these countries", she said.

This was contained in IATA's latest analysis of demand for passenger air transport.

Airlines are on course to increase profits again in 2018, a major industry body has said.

In 2018, IATA forecast airline passengers to spend US$861b, or 1 per cent of world GDP, on travel.

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

"Demand for air freight grew by 5.9% in October".




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. "More routes are being opened".

"Airlines are achieving sustainable levels of profitability", he said while highlighting the challenges of rising fuel costs and well as labour and infrastructure expenses. Average net profit per passenger is also forecast to rise to $8.90, up from $8.45 in 2017.

While there will be growth in passenger and cargo demand, Iata's chief economist Brian Pearce warned that intense competition will continue to put pressure on passenger yields.

"On the other hand, the airline capacity growth in the other Asean markets is more aggressive, namely Singapore, Vietnam, the Philippines and Brunei".

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". "While restocking cycles are usually short-lived, the growth of e-commerce is expected to support continued momentum in the cargo business beyond the rate of expansion of world trade in 2018", it added. After all, global tourists traveling by air are projected to spend more than $750 billion next year, which marks a 15 percent increase in just over two years.

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