KUALA LUMPUR: Airlines in Asia-Pacific are expected to see higher profits of US$9bil next year from US$8.3bil anticipated for 2017, said the International Air Transport Association (IATA).
The strong cyclical rise in cargo markets had been a particular support for this region, given that regional carriers accounted for 37% of global cargo capacity, it said.
“Domestic markets have strengthened in China, India and Japan. New low-cost market entrants in the Asean region is intensifying and contributing to keeping profitability low.
“However, there has been a pause in competitive pressure from the ‘super connectors’ on long-haul routes as they face various challenges in their home markets,” it said in a statement.
For the global industry as a whole, the association said net profit was expected to rise to US$38.4bil in 2018, an improvement from the US$34.5bil expected net profit in 2017, driven by strong demand, efficiency and reduced interest payments.
IATA director-general and chief executive officer Alexandre de Juniac said the global air transport industry was experiencing good momentum, given the solid safety performance and growing number of travellers.
“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.
“It is still, however, a tough business, and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses,” he added. — Bernama