North American traffic recovery boosts October passenger growth

06 December, 2017, 00:36 | Author: Terri Saunders
  • Global passenger traffic up 7.2pc in Oct: IATA

Globally, Iata forecasts global industry net profit to rise to $38.4 billion in 2018, an improvement from the $34.5bn expected net profit in 2017, which Iata revised from a $31.4bn forecast in June. The demand for air cargo is at its strongest level in over a decade.

Rising fuel prices have also hit USA airlines, but high demand and improving economies in Europe have helped trigger profit in airlines worldwide, an IATA economist told Reuters. "While restocking cycles are usually short-lived, the growth of e-commerce is expected to support continued momentum in the cargo business beyond the rate of expansion of world trade in 2018", the association added.

Europe's airlines are in second place with an anticipated US$11.5 billion in profit, boosted by economic recovery in their home markets as well as some consolidation in that region.

The International Air Transport Association (IATA) has cautioned governments across the world about privatising airports to fund growth, a statement that assumes significance as India plans to upgrade and build airports through private sector participation.

Yesterday, Ryanair said that its passenger numbers rose 6pc to 9.3 million in November, with its load factor one point higher at 96pc. "We remain on course for another year of above-trend growth". Cargo volume is expected to grow 4.5% y-o-y to 62.5 million tonnes.

In terms of revenue per passenger kilometres (RPK), airlines are expected to see a 6% growth in 2018 compared with a 5.7% expected increase in available seat kilometres (ASK).

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Passenger demand growth will likely continue in 2018, based on the global economic upturn of recent months, Oxley said.

In 2017, IATA said airlines hit a new record of over 20,000 city-pair connections, up by 1,351 from 2016.

While the total number of reported incidents previous year actually fell by nearly 10 percent to 9,837, the portion that were deemed a higher risk increased from 2015. "Next year, we are expecting Brent crude to be around US$60 and jet fuel to be around US$74 a barrel".

For the first time, more than four billion passengers will be travelling this year, according to the aviation watchdog, and that number is expected to go up to 4.3 billion next year. As a result, net margin will edge up from 4.6 per cent in 2017 to 4.7 per cent in 2018 despite operating margins being squeezed by increasing costs. "This will outpace an expected 3.5 per cent increase in unit revenues", Pearce said.

All regions, except North America, improved load factors during the month, with an overall 0.8 percentage point increase to 80.8 percent.

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