IATA: Solid profits despite rising costs

The International Air Transport Association (IATA) announced its expectation for airlines to achieve a collective net profit of $33.8 billion (4.1% net margin) in 2018. This is a solid performance despite rising costs, primarily fuel and labour, but also the upturn in the interest rate cycle. These rising costs are the main driver behind the downward revision from the previous forecast of $38.4 billion in December 2017. In 2017 airlines earned a record $38.0 billion (revised from the previously estimate of $34.5 billion). Comparisons to this, however, are severely distorted by special accounting items such as one-off tax credits which