Global airlines' industry profit to hit $38.4b in 2018: IATA

Global passenger traffic up 7.2pc in Oct: IATA

Cathay Pacific, Hong Kong's de facto flagship airline, recorded a HK$2.05 billion loss (US$262 million) for the first half of this year and is on track to stay deep in the red over the next 12 months.

Middle East carriers recorded a 6.9 percent rise in demand in October year on year, up from 3.9 percent in September, said the International Air Transport Authority (IATA) in its monthly report released Monday.

All major regions contributed to the better-than-expected forecast, led by Europe and the US.

The value of goods carried by airlines is expected to exceed $6.2 trillion in 2018, representing 7.4% of world GDP.

This was later lifted but there is still the prospect of a travel ban by US President Donald Trump that is making its way through the American courts.

Middle East carriers are forecast to see net profits improve to US$600 million in 2018, up from $300m this year, with demand expected to grow by 7 per cent, outpacing announced capacity expansion of 4.9 per cent, according to the International Air Transport Association (Iata).

Worldwide tourists travelling by air are expected to spend more than $750 billion in 2018, a rise of 15% in just over 2 years.

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. China's surge in domestic traffic over the past couple months reflects a response to a 19% YOY rise in domestic routes being opened within China in 2017.

"Airlines are achieving sustainable levels of profitability", de Juniac said.

Seat-occupancy will reach 81.4% in 2018, while yields, a measure of fares, should advance 3%, according to IATA.

"Broadly speaking, South-east Asian airlines' operating profits and profit margins are expected to be lower year on year in 2018, if fuel prices remain at current levels or rise further", said Corrine Png, chief executive of transport research firm Crucial Perspective.

Average net profit per departing passenger of $8.90, up from $8.45 in 2017.

Capacity in the region was 5.2pc higher, and the load factor fell 1.1 percentage points to 79.2pc.

Earnings will also increase in the Asia-Pacific region and Latin America. "The demand for air freight grew by 5.9 percent in October".

Conditions in the region's two largest economies - Nigeria and South Africa, are still diverging, with business confidence levels in Nigeria near a three-year high, while confidence levels in South Africa are consistent with falling economic activity.

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