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

IATA October traffic 2017

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 inventory-to-sales ratio in the USA is looking sideways, thereby indicating that the period when companies look to restock inventories quickly-which often gives air cargo a boost-has ended.

"It's still, however, a tough business, and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses", Mr de Juniac noted.

This year's profit forecast for the region's airlines has, however, been revised downwards from the $400 million profit IATA forecast in June, which was a 63.6 per cent drop from the $1.1 billion the airlines made in 2016.

IATA said the global air passenger performance in October was helped by a lack of weather-related impacts.

Worldwide passenger demand, measured in revenue passenger kilometers (RPKs), rose 7.3% in October versus the same period past year, according to IATA's latest data.

IATA's report was overwhelmingly positive, with only a few caveats. This is despite an expected decline in operating margin to 8.1 per cent, down from 8.3 per cent.

Geneva/London: Global airline earnings this year will top previous forecasts and surge to a record in 2018, spurred by higher fares and burgeoning cargo demand, according to the industry's main trade group.

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.

"Passenger market conditions vary across the region".

Passenger demand next year is forecast to grow 7.0 per cent, amid the slowest announced capacity expansion seen since 2002 at 4.9 per cent.

The price of jet fuel is expected to increase 12.5 per cent from $65.6 in 2017 to $73.8 in 2018.

Many of Nigerian airlines are IATA members.

The association's chief economist, Brian Pearce, said China had driven a large part of the industry's profits and the country had benefited from a weaker United States dollar. Players that will receive a lift from the more favourable supply environment include AirAsia.

Airlines in all regions recorded growth.

The figures accounts for 190 of the world's airlines so "are likely to significantly underestimate the extent of the problem", IATA's assistant director for external affairs Tim Colehan said in Geneva.

In particular, South-east Asian carriers are facing fierce competition on long-haul routes to North America and Europe, from the Gulf trio and the key Chinese carriers.

Yet challenges remain for Asia's largest worldwide carrier, Cathay Pacific, as well as Singapore Airlines.