Aviation industry will record high profit in 2018

Aviation industryThe aviation industry will record high profit in 2018 due to the improved economies and strong demand for travel in addition to rising prices, says the International Air Transport Association (IATA). The industry profits are expected to grow by 11% to 38.4 billion USD in 2018, after a slight decrease to 34.5 billion USD in 2017.

“The outlook is still good, changing the trend of the eight-year cycles that soon caused a big downturn”, said IATA chief economist, Brian Pierce. “We are already in the eighth year of this air transport cycle, but we do not see any reason to expect this cycle to happen again”, added he.

After six consecutive years of decline, the average cost paid by the passenger per mile and a core indicator of company profitability is also expected to grow by 3% next year after a decline of 1.5% in 2017.

The growth in IATA air carriers is expected for almost all indicators – passenger traffic will increase by 6% in 2018 compared to 2017 and amount to 4.3 billion people. Total revenue will grow by 9.4% to 824 billion USD. Only the margins on operating profit will drop slightly, from 8.3% in 2017 to 8.1% in 2018.

IATA explains optimistic forecasts at once with several factors: relative stability of oil prices, high demand for air transportation from passengers, and increased safety of flights.