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African air travel growth spikes, outpacing strong global recovery

07 December 2017

That's according to research by IATA, the International Air Transport Association.

An estimated 4.3bn passengers will travel next year, with air cargo to rise to 62.5m tonnes. "We have a clear strategy that is delivering results on environmental performance", Alexandre de Juniac, IATA's Director General and CEO, said in a statement.

"Broadly speaking, South-east Asian airlines' operating profits and profit margins are expected to be lower year on year in 2018, if fuel prices remain at current levels or rise further", said Corrine Png, chief executive of transport research firm Crucial Perspective. "One of the concerns we have is the unprofessional operation of small recreational drones because people do not understand the risks they could have against manned aviation", he said.

While IATA expects improved profitability across all regions, North America will continue to lead the way, generating net gains of $16.4 billion.

"Demand for air freight grew by 5.9% in October".

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In good news for airline investors, the industry's return on capital is expected to exceed its cost of capital for a fourth year in a row next year. Demand to and from North America fell in year-on-year terms for the seventh consecutive month in September (the most recent month for which route-specific figures are available) and it remains the only worldwide market not to have grown in annual terms this year.

European airlines generate the second-most revenue when compared by region and made $9.8 billion in net profits this year.

"Airlines are achieving sustainable levels of profitability", he said while highlighting the challenges of rising fuel costs and well as labour and infrastructure expenses.

"Asia-Pacific is leading the way in terms of growth and is clearly the centre of gravity in terms of where the industry is going", said IATA chief economist Brian Pearce, adding that a bigger market size, however, may not necessarily correlate with better profitability. De Juniac urged governments to "raise their game" and do more to ensure infrastructure can cope with higher aviation demand.

The net profit figure of $38.4 billion next year is an improvement on the $34.5 million expected for 2017, itself an increase from the previous forecast of $31.4 billion. In September, global passenger demand had increased 6.6 percent from the previous month.

African air travel growth spikes, outpacing strong global recovery