IATA has revised its 2017 industry profitability outlook, with airlines expected to report a $31.4 billion profit. While global industry revenues are expected to increase to $743 billion in 2017 ($38 billion more than 2016), earnings are being squeezed by rising fuel, labor and maintenance expenses. The average net profit margin will be 4.2% while airlines retain a net profit of $7.69 per passenger.
Asia-Pacific carriers are expected to post a $7.4 billion net profit in 2017, which is equal to $4.96 passenger. Passenger demand is forecast to grow by 10.4%, slightly ahead of capacity growth of 8.8%.
Cargo is playing a large role in the strength of the region’s carriers, which collectively account for about 40% of air cargo shipments. Cargo revenues are rising for the first time in several years and this trend should be boosted by the restocking of retailers and industry in the initial stages of the economic upturn. China continues to reorient its economy away from exports and toward domestic demand. The wider Asia region is still the key source of manufactured components and finished goods which is showing strong demand at the start of the cyclical economic upturn seen in recent quarters.
Watch the highlights from the latest industry outlook below: