Airline industry bumps up profit forecast for 2017 despite global turbulence as it notes flying demand

 
Rebecca Smith
The airline industry is cruising despite a raft of challenges
The airline industry is cruising despite a raft of challenges (Source: Getty)

The global outlook for the airline industry is positive despite ongoing challenges, according to the International Air Transport Association (IATA), which has bumped up its expectations for industry profits for the year.

Forecasting a third straight year of solid earnings, IATA, which represents 275 of the world's airlines, has raised its industry profit outlook to $31.4bn (£24.4bn), up from its previous prediction of $29.8bn. It has also raised its forecast for industry revenue for 2017 to $743bn, from $736bn, bolstered by the belief that the global economy is set to post its strongest growth in six years.

Passenger numbers are set to top four billion for the first time this year.

Read more: Laptop ban branded ineffective by airline industry body IATA

The bumped up predictions come despite challenging times for airlines as they face ongoing concerns over terror attacks, fresh restrictions regarding electronics on flights, and uncertainty as to changing global relations with Brexit on the horizon and no clear outcome on what will happen with the Open Skies agreement for Britain.

In his speech yesterday, director general of IATA, Alexandre de Juniac, was critical of the US and UK bans on laptops and tablets on certain flights, saying that taking electronic devices from passengers has real cost to them.

"In the ban's current scope we estimate $180m in lost productivity. And that could surge to $1.2bn if the ban is expanded to flights from Europe to the US," he said. "There is a clear duty to make sure that the measures are logical, effective and efficient. That is not the case with the current ban. And it must change."

De Juniac said the positive forecast for airlines despite the challenges comes as "passengers are benefiting from modern fleets, expanded networks and more product choice", with strong demand "driving profitability".

He also noted air cargo providing a boost, having "awakened from a six-year coma". Growth there has been propelled by e-commerce and pharmaceutical shipments.

Read more: This airline is launching boarding by facial recognition

Related articles