Chart: Global Commercial Airline Profitability

IATA Predicts More Profitability For Global Aviation In 2018

IATA forecast for 2018 sees strong air traffic growth and profitability, calls for more supportive government policies.

The International Air Transport Association (IATA) says 4.3 billion passengers are expected to fly in 2018, an annual increase of 6%. Its global industry report forecasts another record-breaking year for airline profitability. Net revenues are expected to reach $34.5 billion, due in part to a 6% passenger growth and a 0.1% increase in net margins.

If the forecast comes to fruition, 2018 will be the industry’s eighth consecutive year of profitability, and, according to IATA Director General and CEO Alexandre de Juniac, the fourth year “airlines have made an aggregate industry profit in excess of our cost of capital.” That is something, says de Junaic, that has never happened before.

The biggest profit obstacles are jet fuel prices—expected to increase by 12.5%—and labor costs, which have officially surpassed fuel as industry’s largest expense. The association also points to government stalemates as an impediment to further growth.

“Aviation is the business of freedom and a catalyst for growth and development,” said de Juniac. “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.”

The outlook is released annually and was presented at IATA’s Global Media Day in Geneva.

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