Despite rising costs and an upturn in the interest rate cycle, the International Air Transport Association (Iata) expects airlines to achieve a collective net profit of $33.8 billion (4.1% net margin) in 2018.
The rising costs – primarily fuel and labour - are the main drivers behind the downward revision from the previous forecast of $38.4 billion in December 2017.
Cargo demand has benefited from the largely unexpected acceleration in the growth of the global economy over the past year. As businesses rushed to respond, they turned to air transport to replenish inventory, producing strong air cargo growth in 2017. That restocking cycle has however come to an end.
Cargo demand is expected to grow by 4.0%. This is a major drop from the 9.7% growth experienced in 2017, but it remains in line with the 20-year trend growth rate.
