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Despite burgeoning costs, the International Air Transport Association (Iata) projects that the world's airlines will clock a record profit of US$38.4 billion in 2018, thanks to healthy demand, greater efficiency and reduced interest payments on debt.

Europe: Europe-based carriers are expected to deliver a net profit of $11.5 billion in 2018, up from $9.8 billion in 2017. Of the $38.4bn, $27.9bn will come from North American and European airlines.

IATA said there "continues to be indications" that inbound U.S. travel is being deterred by the additional security measures now involved when travelling to the country.

IATA's statistics show that, when compared to the same month in 2016, passenger traffic in China grew by an impressive 10 percent in October.

Iata chief Alexandre de Juniac said: "These are good times for the global air transport industry". 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.

Despite strong cargo demand in October, the IATA report indicates that its growth may have ebbed. A rise in cargo carried to 62.5 million tonnes (up 4.5 per cent on the 59.9 million tonnes in 2017).

North American airlines are once again primed to record the highest profits in the industry.

Africa: African carriers are expected to continue to make small losses of $100 million in 2018 following a collective net loss of $100 million in 2017.

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.

Overall, IATA is expecting the industry-wide operating margin to squeeze to 8.1% next year from 8.3% in 2017, though it sees net margins rising to 4.7% next year from 4.6% this year.

It's the 15th consecutive month that the demand growth outstripped the capacity growth, which is believed to be a positive indicator for load factors, yields, and financial performance.

The upward cost pressure from fuel prices is in tandem with rising charges by airline industry suppliers and new infrastructure costs that are contributing to an expected slowdown in capacity increases in 2018, he added.

Freight volumes are still expected to grow in 2018, although at a slower pace than in 2017.


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