Published: Tue, December 05, 2017
Worldwide | By Isabel Fisher

Middle East Airlines' Profits to Double in 2018, Says IATA

Middle East Airlines' Profits to Double in 2018, Says IATA

The global airlines grouping also said that economic development worldwide is getting a significant boost from air transport.

"We see no reason for this cycle to end at the moment".

The last low point in air travel was after the global financial crisis in 2009.

IATA director-general and chief executive officer Alexandre de Juniac said airlines are achieving sustainable levels of profitability, but challenges remain.

Globally, IATA is expecting net profit to rise to hit US$38.4 billion next year, up 11.3% from the US$34.5 billion expected for 2017.

The IATA data showed that India's domestic RPK - which measures actual passenger traffic - rose by over 20 per cent in October compared to the corresponding month of the previous year.

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

Cargo freight tonne kilometres are expected to grow by 4.5% in 2018, slowing from the 9.3% growth registered this year as companies restock inventories quickly to meet unexpectedly strong demand.

Besides, IATA expects the value of global trade shipped by air next year to be United States dollars 6.2 trillion while tourists travelling by air in 2018 are anticipated to spend USD 776 billion. De Juniac has said insolvency filings at carriers including Air Berlin Plc and Alitalia SpA reflect over-capacity rather than market weakness.

In its statement, IATA said the US figure, up from a forecast $15.6 billion in 2017, actually represents a slight fall away in market share.

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

"More people than ever are traveling", he said.

IATA said demand to and from North America in particular fell in year-on-year terms for the seventh consecutive month.

"We believe industry profitability is on a more sustained path so even in weakened business conditions we think the industry will perform better than it has in the past because of the (load factor) gap", said Pearce, noting that while low oil prices have contributed, the load factor gap has been above breakeven level since before 2015.

Worldwide travel grew 7.3 percent, capacity grew 6 percent, and load factor increased 1 percent. Volumes are expected to grow by 4.5 per cent in 2018, down from the 9.3 per cent growth of 2017.

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