Airline industry profits soar 11 percent in 2017

What airlines make out of each passenger

Airlines Forcibly Removing More and More Drunk Passengers From Flights

The International Air Transport Association (IATA) reported on the performance of the airline industry at its headquarters in Geneva this week, revealing that airlines served more than 20,000 city-pair connections this year.

According to the forecast by the industry's global trade association, combined net profits will hit USD38.4 billion, from a revised USD34.5 billion in 2017, with USA carriers weighing in with nearly half. It is expected to be the fourth consecutive year of sustainable profits with a return on invested capital (9.4 per cent) exceeding the industry's average cost of capital (7.4 per cent).

The number of incidents involving unruly airline passengers has ballooned in 2017, leading airlines to physically restrain or remove aggressive and often drunken passengers more than ever before. "Employment is growing. More routes are being opened". We have a clear strategy that is delivering results on environmental performance.

The association expects oil prices to average USD60 for a barrel of Brent Crude - a rise of 10.7% on this year, taking oil-related costs up from 18.8% to 20.5%.

"Governments are not meeting their responsibility to provide sufficient infrastructure for the industry to meet demand", de Juniac said.

De Juniac urged governments to "raise their game" and do more to ensure infrastructure can cope with higher aviation demand.

Overall, reported incidents declined almost 10 percent in 2016 to 9,837, but the number viewed as higher risk rose from the previous year, the association said.

"The boost to cargo volumes in 2017 was a result of companies needing to restock inventories quickly to meet unexpectedly strong demand", IATA said. This led cargo volumes to grow at twice the pace of the expansion in world trade of 4.3 per cent.

Another 200 million passengers are expected to travel although the rate of growth is slowing.

IATA described costs as the "biggest challenge to profitability" in 2018, with jet oil prices expected to jump 12.5 per cent in 2018 compared with 2017 levels.

"Airlines with low levels of hedging (in the United States and China for example) are likely to feel the impact of this increase more immediately than those with higher average hedging ratios (Europe)", IATA said. Accelarating labour costs will see wages take a 30.9% chunk meanwhile next year.

On a positive note, the recent run of industry profitability has allowed airlines to pay down debt and reduce interest payments.

Altre Notizie