IATA forecasts airline profit fall in 2018

Fabrice Coffrini | AFP | Getty Images

IATA CEO Alexandre De Juniac on December 8, 2014.

Following the release, IATA’s director general and CEO, Alexandre de Juniac, told reporters in Sydney that rising labor costs and trade tensions could also negatively affect airlines. De Juniac said airlines could be hit by the effects of “political forces pushing a protectionist agenda.”

Despite the reduction in margins, he remained upbeat, noting that, on average, the airlines’ return on invested capital will top the cost of capital for a fourth consecutive year.

“At long last, normal profits are becoming normal for airlines,” he said.

IATA claimed that the 2018 average return airfare, before surcharges and tax, is expected to be $380, 59 percent below 1998 levels after adjusting for inflation.

The industry body also said it expected 1,900 new commercial aircraft to be delivered to airlines in 2018.