Hard brexit would be a 'disaster' for UK-based airlines - IATA chief

The upgraded estimate for this year is still slightly below 2016’s $34.8 billion earnings figure but the 2018 prediction to $38.4 billion would represent a new industry high as passenger numbers top 4.3 billion

Global passenger traffic up 7.2pc in Oct: IATA

The industry will see net profits rising 11.3 per cent to $38.4 billion (Dh141.04 billion) in 2018, marking slight improvement from the $34.5 billion it will make this year (revised up from the $31.4 billion forecast in June).

The association said worldwide passenger demand rose by 7.3 per cent y-o-y, with airlines in all regions recording traffic growth.

In its latest forecast, Iata also hoisted its 2017 global profitability forecast for the second time this year.

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"Safety performance is solid. Airlines are achieving sustainable levels of profitability", said Mr de Juniac.

To continue to deliver on our full potential, governments need to raise their game-implementing global standards on security, finding a reasonable level of taxation, delivering smarter regulation and building the cost-efficient infrastructure to accommodate growing demand.

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

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This marks 16 consecutive months above the 50 no-change value, however, service providers' optimism for the year ahead remained much weaker than the long-run survey average.

"The benefits of aviation are compelling - 2.7 million direct jobs and critical support for 3.5% of global economic activity". Overall revenues are seen rising 9.4% y-o-y to US$824 billion in 2018. Cargo volume is expected to grow 4.5% y-o-y to 62.5 million tonnes.

Asia-Pacific: Airlines in this region are forecast to see profits of $9 billion in 2018, up from $8.3 billion in 2017. "More people than ever are traveling". "If (traffic rights) are not negotiated because it is a hard Brexit it will be a disaster for the UK-based carriers because they will not be allowed to land in Europe, which is a small problem", Alexandre de Juniac told reporters in Geneva on Tuesday, although said he didn't think it would come to that.

In response to the tougher conditions regional carriers have cut costs and unprofitable routes, with Dubai carrier Emirates reporting a 111 per cent increase in profit to $214m in the April 1 to September 30 period after a 75 per cent slump in the first half of its previous fiscal year. Passenger traffic (revenue passenger kilometers or RPKs) is expected to rise 6.0 per cent (slightly down on the 7.5 per cent growth of 2017 but still ahead of the average of the past 10-20 years of 5.5 per cent), which will exceed a capacity expansion (available seat kilometers or ASKs) of 5.7 per cent.

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The Middle Eastern carriers are poised to double profits to US$600 million next year due to a 7 per cent growth in demand and a scaling back of capacity injection. Cargo revenues will continue to do well in 2018, reaching $59.2bn, up 8.6 per cent from expected 2017 revenues of $54.5bn.

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