IATA eyes 11% rise in airlines’ global profit next year

Tourism December 05, 2017 17:54

By The Nation

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The International Air Transport Association (IATA) forecasts global industry net profit to rise to US38.4 billion (Bt1.25 trillion) in 2018, an 11.3-per-cent improvement from the $34.5 billion expected this year.

The 2017 forecast is an upward revision of the $31.4 billion it predicted in June. 

Strong demand, efficiency and reduced interest payments will help airlines improve net profitability next year despite rising costs, the association said on Tuesday. 

2018 is expected to be the fourth consecutive year of sustainable profits, with a 9.4-per-cent return on invested capital exceeding the industry’s average cost of capital, at 7.4 per cent.

“These are good times for the global air transport industry. Safety performance is solid. We have a clear strategy that is delivering results on environmental performance. More people than ever are travelling. 

“The demand for air cargo is at its strongest level in over a decade. Employment is growing. More routes are being opened. Airlines are achieving sustainable levels of profitability,” said Alexandre de Juniac, IATA’s director-general and chief executive officer.

“ It’s still, however, a tough business, and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses,” he added.