Home / World / US airlines to scoop almost half of global profit in 2018

US airlines to scoop almost half of global profit in 2018


A Qatar Cargo Boeing 777F plane and an American Airlines Airbus 321 prepare for take off at Los Angeles International Airport in Los Angeles, California.

John Gress | Getty Images

A Qatar Cargo Boeing 777F plane and an American Airlines Airbus 321 prepare for take off at Los Angeles International Airport in Los Angeles, California.

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

The International Air Transport Association (IATA) made the claim in its latest forecast of the global airline industry, published Tuesday. IATA is a trade body that claims to represent more than 80 percent of air traffic.

In its report, the association said total airline industry net profit in 2018 will rise to $38.4 billion, an increase of around 11 percent on the projected figure for 2017.

The bulk of the profit generated next year will come from North America where, according to IATA, airlines in the region are forecast to record a combined net profit of $16.4 billion.

In its statement, IATA said the U.S. figure, up from a forecast $15.6 billion in 2017, actually represents a slight fall away in market share.

“North American airlines have generated more than half of the industry’s profits produced in the past three years, but rising cost pressures have slowed further improvements,” the report said.

IATA has estimated 2018 airline capacity growth to be 3.4 percent for North America, just shy of the region’s forecast traffic growth of 3.5 percent.

It noted that U.S. airlines have been hit hardest by rising fuel prices due to previously employing a low hedging strategy, in comparison to other parts of the world. Hedging is when airlines fix the future cost of their fuel to take away the risk of price swings.

About admin

Check Also

Activision Blizzard agrees to settle California sex discrimination case

Activision Blizzard CEO Bobby Kotick speaks at the CNBC Evolve conference November 19th in Los …