Global airline industry's 2018 net profit expected to rise: IATA

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Middle East carriers recorded a 6.9 percent rise in demand in October year on year, up from 3.9 percent in September, said the International Air Transport Authority (IATA) in its monthly report released Monday.

The average net profit per departing passenger will also rise slightly to $8.90 next year, from $8.45 in 2017.

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IATA said the forecast increase in passenger fares was in line with expected inflation.

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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 past year. Worldwide traffic for North American carriers grew 3.7% during the month (compared to 3% in September) as global capacity in the region grew 5.2%, causing the region's worldwide load factor to slide 1.1 points YOY to 79.2%.

"We are eight years into this air travel cycle, but we see no reason at present to expect that cyclical pattern to repeat itself", IATA Chief Economist Brian Pearce said, with reference to a trend that would usually indicate a major downturn was due.

An estimated 4.3bn passengers will travel next year, with air cargo to rise to 62.5m tonnes. Labour costs are also rising to become a larger expense than fuel, at 30.9 per cent, according to the organisation.

For the first time, more than four billion passengers will be travelling this year, according to the aviation watchdog, and that number is expected to go up to 4.3 billion next year.

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While the demand in the cargo markets remains strong, several indicators show that it may have passed the growth peak.

Asia-Pacific was followed by Latin American airlines which had traffic growth of 8.7 percent. North America was one of just two regions to post a load factor decline. "Despite the challenges, there is positive momentum heading into 2018", said Iata, whose 280 members account for more than three quarters of global air traffic.

"Domestic markets have strengthened in China, India and Japan".

"Per passenger, airlines on average will make less than $9 and the net margin of 4.7 per cent is hard won", he added. Airlines are achieving sustainable levels of profitability.

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