Airlines set for record profit in 2018, fare rise forecast (RY4B)

Airlines set for record profit in 2018, fare rise forecast (RY4B)

The International Air Transport Association (IATA) announced global passenger traffic results for October showing that demand (measured in revenue passenger kilometres, or RPKs) rose 7.2% compared to the same month previous year. She highlighted examples such as for the last mile for small parcel deliveries, transporting goods to remote or isolated areas and on routes which are not economically viable for larger aircraft. "Despite the challenges, there is positive momentum heading into 2018", said Iata, whose 280 members account for more than three quarters of global air traffic.

More than 2.7 million people are expected to be employed in the aviation industry in 2018. Demand to and from North America fell in year-on-year terms for the seventh consecutive month in September (the most recent month for which route-specific figures are available) and it remains the only global market not to have grown in annual terms this year.

Africa, in contrast, is likely to turn in albeit stable collective net losses of $100 million despite forecast demand growth of 8% and announced capacity expansion of 7.5%.

The global airlines' grouping anticipates regional air transport demand to grow 7% y-o-y in 2018, while capacity is expected to rise by 6.8% y-o-y.

The association expects oil prices to average $60 for a barrel of Brent Crude - a rise of 10.7 per cent on this year, taking oil-related costs up from 18.8 per cent to 20.5 per cent. Accelarating labour costs will see wages take a 30.9 per cent chunk. meanwhile. next year.

"The industry is reacting to that cost pressure". Overall revenues are seen rising 9.4% y-o-y to US$824 billion in 2018.




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

The organisation forecast profit would grow to $600m next year from $300m this year on the back of a minor increase in demand.

Aside Africa, virtually all the continent's airlines from Asia Pacific, Europe, Middle East, North America and Latin America recorded appreciable traffic growth.

De Juniac added that it was vital for governments to support the growing airline industry as it faces longer term challenges.

And the IATA said growth is expected to continue in 2018 by almost $1 billion to $16.4 billion. "Many of them are in the hands of governments".

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