MidEast airlines forecast to see profits lift to $600m in 2018

International Air Transport Association says regional demand is set to groow by 7% next year
MidEast airlines forecast to see profits lift to $600m in 2018
(KARIM SAHIB/AFP/Getty Images - for illustrative purposes only)
By Staff writer
Wed 06 Dec 2017 01:38 PM

Middle East carriers are forecast to see net profits improve to $600 million in 2018, up from $300 million in 2017, according to new figures from the International Air Transport Association (IATA).

Demand in 2018 is expected to grow by 7 percent, outpacing announced capacity expansion of 4.9 percent, which is the slowest growth since 2002.

IATA said 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 US, and competition from Turkish Airlines.

Despite the challenges, there is positive momentum heading into 2018, IATA added.

Globally, IATA forecasts global industry net profit to rise to $38.4 billion in 2018, an improvement from the $34.5 billion expected net profit in 2017.

A slight decline in the operating margin is expected to 8.1 percent, down from 8.3 percent in 2017, alongside an improvement in net margin to 4.7 percent.
IATA figures also forecast a rise in overall revenues to $824 billion, up 9.4 percent on 2017 revenues of $754 billion, and a rise in passenger numbers to 4.3 billion, up from 4.1 billion passengers in 2017.

A rise in cargo carried to 62.5 million tonnes is also predicted while the average net profit per departing passenger is seen increasing to $8.90, up from $8.45 in 2017.

"These are good times for the global air transport industry. Safety performance is solid. We have a clear strategy that is delivering results on environmental performance. More people than ever are traveling. The demand for air cargo is at its strongest level in over a decade. Employment is growing. More routes are being opened," said Alexandre de Juniac, IATA’s director general and CEO.

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