The airline industry is on course for record profit in 2018

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Airlines are set for a record year in 2018 (Source: Getty)

Airlines are on course to increase profits again in 2018, a major industry body has said.

The International Air Transport Association (IATA) forecast a rise in net profit to $38.4bn in 2018, up from an expected $34.5bn for 2017.

A boom in traveller numbers has already led to this year's projected net profit being revised up, after it was forecast at $31.4bn in June.

The heightened expectations are a result of strong demand, efficiency, and reduced interest payments the IATA said. This is despite an expected decline in operating margin to 8.1 per cent, down from 8.3 per cent.

“These are good times for the global air transport industry," said the IATA's chief executive Alexandre de Juniac.

"Safety performance is solid. We have a clear strategy that is delivering results on environmental performance. More people than ever are travelling. The demand for air cargo is at its strongest level in over a decade.

"Employment is growing. More routes are being opened. Airlines are achieving sustainable levels of profitability. It’s still, however, a tough business, and we are being challenged on the cost front by rising fuel, labour and infrastructure expenses."

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An estimated 4.3bn passengers will travel next year, with air cargo to rise to 62.5m tonnes.

But this still represents slower growth than 2017, which has proved to be a bumper year for the aviation industry. While passenger numbers will rise six per cent next year, this year has seen an increase of 7.5 per cent.

De Juniac added that it was vital for governments to support the growing airline industry as it faces longer term challenges.

He said: "To continue to deliver on our full potential, governments need to raise their game—implementing global standards on security, finding a reasonable level of taxation, delivering smarter regulation and building the cost-efficient infrastructure to accommodate growing demand."

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