IATA reveals 2018 financial forecast

Posted December 07, 2017

The association said global passenger demand rose by 7.3 per cent y-o-y, with airlines in all regions recording traffic growth.

"These are good times for the global air transport industry".

The IATA said the higher revenues are due in part to more passengers and more cargo. "More routes are being opened".

In October, domestic air traffic in India grew by 20.4 percent, while it grew by 10 percent in China, 7.7 percent in Brazil, 6.1 percent in Russian Federation, 5.3 percent in the U.S., 2.8 percent in Australia, and 2.3 percent in Japan.

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An estimated 4.3bn passengers will travel next year, with air cargo to rise to 62.5m tonnes.

Total passenger revenue is forecast to grow to $581 billion, from $532 billion this year as passenger numbers rise to 4.3 billion, from 4.1 billion.

While IATA expects improved profitability across all regions, North America will continue to lead the way, generating net gains of $16.4 billion.

Despite the rise in passenger and cargo numbers, the rate of growth for both will be lower in 2018 then 2017, IATA said.

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Airlines in North America generate almost half of airline revenue across the globe and the largest net profit with $15.6 billion this year. "It's still, however, a tough business, and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses". "Many of them are in the hands of governments".

"Asia-Pacific is leading the way in terms of growth and is clearly the centre of gravity in terms of where the industry is going", said IATA chief economist Brian Pearce, adding that a bigger market size, however, may not necessarily correlate with better profitability.

"By bringing together people of different backgrounds and cultures to do business, to learn from one another and to solve problems, aviation provides vast value beyond what can be calculated. 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", de Juniac said. The benefits of aviation are compelling-2.7 million direct jobs and critical support for 3.5 per cent of global economic activity.

After declining for six years in a row, passenger yields, a measure of ticket pricing, are also expected to rise 3 percent next year after falling 1.5 per cent in 2017.

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