Demand is projected to outpace airline capacity by next year.
Airlines in the Asia Pacific can expect more than clearer skies ahead as they are forecasted to enjoy higher profitability with an estimated $9b profits over the next 12 months up from $8.3b in 2017, according to a press release from the International Air Transport Association (IATA).
Net profits are on a strong growth trajectory in the last three years thanks to strong cyclical rise in cargo markets which account for 37% of the world’s global cargo capacity.
IATA adds that the estimated 7% demand growth will outpace announced capacity increase of 6.8%.
Passenger market conditions vary across markets but domestic markets are particularly strong in China, India and Japan with an average profit per passenger at US$5.52 as higher fuel costs are offset by strong performance from cargo markets.
“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. Airlines are achieving sustainable levels of profitability,” said Alexandre de Juniac, IATA’s Director General and CEO, adding that rising fuel, labour, and infrastructure expenses continue to be pressing challenges.
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