IATA predicts profit take-off

THE International Air Transport Association has revised its 2017 global industry profitability outlook, with carriers collectively expected to report a US$31.4 billion profit this year.

Revenues are also forecast to increase to US$743 billion, up from the previous prediction of US$736 billion, with IATA ceo Alexandre de Juniac saying it will be “another solid year of performance” for the sector.

However despite cargo and passenger demand being stronger than expected, “earnings are being squeezed by rising fuel, labour and maintenance expenses,” he warned.

IATA says passenger demand will grow 7.4% this year, up 2.3 points on previous predictions.

That’s the same growth rate as experienced in 2016, with global economic growth much better than anticipated.

While that’s good for airline profitability, travellers are likely to see more crowded aircraft with average load factors expected to reach 80.6% as demand outstrips capacity growth.

Air cargo demand is also surging, with IATA saying firms are turning to rapid air transport to restock inventories.

“There are also retail trends such as the switch to e-commerce and in pharmaceuticals that are supporting air cargo growth”.

Increased profitability is being helped by low fuel prices.

MEANWHILE at the IATA annual general meeting in Cancun overnight de Juniac warned about the threat of protectionist measures being imposed on airlines by governments.

“Nothing should stand in the way of aviation - the business of freedom,” the IATA ceo said.

“To deliver aviation’s many benefits we need borders that are open to people and trade”.

De Juniac also urged a solution to the current ban on large portable electronic devices in the cabin on some flights from the Middle East and North Africa.

The full Director-General’s Report on the Global Air Transport Industry can be viewed online at www.iata.org.