IATA has lifted its expectations for industry profits this year slightly to $31.4 billion on strong traffic demand, including the improved air cargo market.
The outlook, disclosed during its AGM in Cancun, marks a $1.6 billion improvement on the $29.8 billion it projected in its last forecast for 2017 six months ago. That though still marks a fall on the $34.8 billion profit IATA now expects the industry to have made in 2016.
"The passenger business is expected to grow by 7.4% this year," says IATA director general Alexandre de Juniac. "Passenger numbers will top 4 billion for the first time this year.
"Strong demand is driving profitability," he adds. "That includes air cargo, which has awakened from a six-year coma. 7.5% growth is being powered by e-commerce and pharmaceutical shipments."
But he offers a note of caution. "Margins are being squeezed by rising costs for fuel and labour. And the $7.69 average profit per passenger still does not provide a thick buffer to economic shocks.
"Moreover, profitability is not equally spread across the regions," he says. "Half the industry's profits are being made in North America. Asia, Latin America and Europe are generating sustainable profits, but only just. And Africa and the Middle East are struggling."
Article updated to include IATA's revised figure for industry profits in 2016 and correct headline
Source: Cirium Dashboard
