IATA says Middle East airline net profit will double in 2018

The upgraded estimate for this year is still slightly below 2016’s $34.8 billion earnings figure but the 2018 prediction to $38.4 billion would represent a new industry high as passenger numbers top 4.3 billion

While passenger numbers will rise six per cent next year, this year has seen an increase of 7.5 per cent.

The organisation - which represents more than 270 airlines accounting for 83pc of global air passenger traffic - said that passenger demand jumped 7.2pc in October compared to October 2016, with demand in Europe rising 6.2pc year-on-year.

The positive outlook is the result of solid airline safety performance; a clear strategy that is delivering results on environmental performance; more people than ever are traveling; demand for air cargo is at its strongest level in over a decade; employment is growing; and more routes are being opened.

IATA Director General and CEO Alexandre de Juniac said it is good times for the global air transport industry and airlines are achieving sustainable levels of profitability.

African airlines' traffic grew 7.5% year-on-year in October, up from 3.6% in September.

Volumes are expected to grow by 4.5 per cent in 2018, down from the 9.3 per cent growth of 2017. "The region's carriers face challenges to their business models, and from low oil revenues, regional conflict, crowded air space, the impact of travel restrictions to the United States, and competition the new "super connector" (Turkish Airlines)".


"On the other hand, the airline capacity growth in the other Asean markets is more aggressive, namely Singapore, Vietnam, the Philippines and Brunei".

"Aviation is the business of freedom and a catalyst for growth and development".

The region's carriers face challenges to their business models, Iata said, and from low oil revenues, regional conflict, crowded air space, the impact of travel restrictions to the U.S., and competition from the new "super connector" [Turkish Airlines]. Freight capacity, measured in available freight tonne kilometers, increased by 3.7 percent year-over October.

Andrew Herdman, director-general of the Association of Asia Pacific Airlines, expects that airfares in Asia, which remain at "very affordable levels", may need to be increased in line with higher oil prices. 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). Overall revenues are seen rising 9.4% y-o-y to US$824 billion in 2018.

Middle East airlines will see net profits doubling to $600 million in 2018, up from the $300 million they made in 2017, according to IATA.

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