News Worms
News Worms

Middle East airline profits to double next year, says Iata

Middle East airline profits to double next year, says Iata

Overall profit is expected to rise 11% to $38.4bn in 2018, and the outlook is encouraging, IATA said on Tuesday as it raised its 2017 forecast to $34.5bn, up from an earlier $31.4bn estimate, but still lower than 2016.

To continue to deliver on our full potential, governments need to raise their game-implementing global standards on security, finding a reasonable level of taxation, delivering smarter regulation and building the cost-efficient infrastructure to accommodate growing demand. "It's still, however, a tough business, and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses". Despite the challenges, the aviation body said there is positive momentum heading into 2018.

North American airlines are once again primed to record the highest profits in the industry.

In its latest forecast, Iata also hoisted its 2017 global profitability forecast for the second time this year.

For cargo volume, the strong growth seen in 2017 was due to unexpectedly strong demand that pushed companies to restock inventories quickly, IATA said.

Asia Pacific continued to lead the way with an 8.9 percent increase in capacity, followed by the Middle East on 5.4 percent and North America on 5.3 percent. With oil prices trending higher, jet fuel prices are expected to rise by 12.5 per cent to US$73.8 per barrel next year. The association expects the faster demand growth to push average load factor to a record 81.4%, which it expects to boost yields by 3%. 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 global load factor to slide 1.1 points YOY to 79.2%. It is based on data provided by IATA member airlines during October 2017. "Since average consumer prices across the world have more than doubled, this represents a halving in the real or inflation-adjusted cost of air transport", said Pearce.

While the total number of reported incidents past year actually fell by nearly 10 percent to 9,837, the portion that were deemed a higher risk increased from 2015.

In terms of air freight, cargo volumes are similarly expected to rise at a slower pace than this year, down from 9.3 per cent in 2017 to 4.5 per cent in 2018, to reach 62.5 million tonnes. Cargo revenues will continue to do well in 2018, reaching $59.2bn, up 8.6 per cent from expected 2017 revenues of $54.5bn.

In a statement today, IATA said, passenger capacity grew by 6.2 per cent and load factor climbed 0.8 percentage point to 80.8 per cent year-on-year (y-o-y).


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