Global Airlines’ Industry Profit To Hit $38.4b in 2018: IATA

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The International Airport Transport Association (IATA)  says the global airlines’ industry is projected to record a higher net profit of $38.4bn in 2018, primarily supported by strong demand, industry grouping.

IATA said the expected net profit is more than $34.5 bn projected for this year. The figure for 2017 was revised upwards from  $31.4 b forecast in June.

Strong demand, efficiency and reduced interest payments would help airlines improve net profitability in 2018 despite rising costs.

“2018 is expected to be the fourth consecutive year of sustainable profits with a return on invested capital (9.4 per cent) exceeding the industry’s average cost of capital (7.4 per cent),” IATA said in its ‘State of the Industry and Global Economic Outlook’ report.

The report was released at the IATA Global Media Day here.

Overall revenues are also forecast to climb to $824bn next year, from $754bn seen in 2017.

Reflecting strong demand, the worldwide air passenger numbers are expected to cross 4 billion this year and grow further to 4.3 billion in 2018.

“Next year, the average world citizen will travel once every 21 months. Back in 1996, the average citizen flew just once every 50 months and in 2000, every 43 months,” it said.

IATA Director General and CEO, Alexandre de Juniac said it is good times for the global air transport industry and airlines are achieving sustainable levels of profitability. .

In 2018, direct employment by the airline industry is forecast to be more than 2.7 million.

Further, Juniac said the forecast of record net profit of $38.4bn for the next year is still $10bn shy of the profit that Apple announced for 2016.

“Per passenger, airlines on average will make less than $9 and the net margin of 4.7 per cent is hard won,” he added.