IATA says Middle East airline net profit will double in 2018

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Continent-wide, capacity rose 3.4%, and load factor jumped 2.7 percentage points to 70.9%, Iata said. 2018 is expected to be the fourth consecutive year of sustainable profits.

IATA has forecast higher passenger numbers and revenue for the world's airlines in 2018, with annual net profits rising to USD$38.4 billion.

Overall, revenues are expected to rise to $824 billion, up from 2017 revenues of $754 billion.

The data showed Asia-Pacific airlines leading all regions with traffic growth of 10.3% from the comparable period a year earlier, and up from an 8.7% rise in September.

"As expected, the recent severe weather in the Americas region had only a temporary impact on the healthy travel demand we have seen this year, and we remain on course for another year of above-trend growth", said Iata CEO Alexandre de Juniac.

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

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.

The organisation forecast profit would grow to $600m next year from $300m this year on the back of a minor increase in demand. De Juniac also cited potential government interference in aviation practices as a factor in the coming year.

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.

Strong demand, efficiency and reduced interest payments will help airlines improve net profitability in 2018 despite rising costs, de Juniac said. As a result, net margin will edge up from 4.6 per cent in 2017 to 4.7 per cent in 2018 despite operating margins being squeezed by increasing costs. Turning to environmental concerns, IATA, which said the inflation-adjusted cost of flying had halved for consumers since 1996, said aviation was committed to managing its carbon footprint with a near-term goal of capping emissions through carbon-neutral growth from 2020.

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