Passenger demand in Middle East picks up in October: IATA report

  • Passenger demand in Middle East picks up in October: IATA report

Passenger demand in Middle East picks up in October: IATA report

Geneva - Improving economies and robust travel demand will return global airlines to record profit in 2018, with fares also set to rise, the International Air Transport Association (IATA) said.

The industry will see net profits rising 11.3 per cent to $38.4 billion (Dh141.04 billion) in 2018, marking slight improvement from the $34.5 billion it will make this year (revised up from the $31.4 billion forecast in June).

The strong 2018 forecast is fueled by IATA's projection that the number of airline passengers will increase 6% next year to 4.3 billion, helping revenue jump 9.4%, to $824 billion.

A hard Brexit would be a "disaster" for UK-based airlines, the head of the International Air Transport Association said on Tuesday.

IATA Director General/Chief Executive Officer, Alexandre de Juniac, said demand for air travel remained strong ahead of the holiday travel season. "Airlines are achieving sustainable levels of profitability", added de Juniac, while highlighting the challenges of rising fuel costs and well as labour and infrastructure expenses. "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", de Juniac said.

However, the industry also faces longer-term challenges and many of them are in the hands of governments, he said.

"The benefits of aviation are compelling - 2.7 million direct jobs and critical support for 3.5% of global economic activity".

"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 USA, and competition the new "super connector" [Turkish Airlines]", IATA said.

"This year airlines will safely fly 4 billion people and 60 million tonnes of cargo over some 20,000 city pairs". After languishing in the doldrums in recent years, cargo volumes are slated to expand from 59.9 million tonnes this year to 62.5 million tonnes in 2018.

"The focus is really on the pressure from cost (increases)", said Pearce.

It's the 15th consecutive month that the demand growth outstripped the capacity growth, which is believed to be a positive indicator for load factors, yields, and financial performance. Passengers have directly contributed to the growth in profit, as the average net profit per departing passenger is expected to rise to $8.90 (up from $8.45 in 2017).