The price of jet fuel is forecast to jump nearly 13 percent, weighing on earnings at carriers with limited hedging, such as those in the US and China.The upgraded estimate for this year is still slightly below 2016's $34.8 billion earnings figure, but the 2018 prediction to $38.4 billion would represent a new industry high as passenger numbers top 4.3 billion.
The strong 2018 forecast is fueled by IATA's projection that the number of airline passengers will increase 6% next year to 4.3 billion, helping revenue jump 9.4%, to $824 billion.
IATA represents around 275 airlines comprising 83 per cent of global air traffic.
"Airlines are achieving sustainable levels of profitability", he said while highlighting the challenges of rising fuel costs and well as labour and infrastructure expenses. "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", he said.
He said the aviation industry benefits to the economy include 2.7 million direct jobs and support for 3.5 per cent of global economic activity.
Passenger demand growth will likely continue in 2018, based on the global economic upturn of recent months, Oxley said.
All major regions are expected to contribute, led by Europe and the U.S. More cargo is being sent by air as people increasingly buy goods over the Internet-giving a particular lift to Asian exports.
Worldwide tourists travelling by air are expected to spend more than $750 billion in 2018, a rise of 15% in just over 2 years.
A rise in cargo carried to 62.5 million tonnes, up 4.5% on the 59.9 million tonnes in 2017.
That said, IATA expects passenger load factor to remain comfortably above the breakeven point for airlines globally going into 2018, despite earnings before interest and tax (EBIT) coming under pressure from higher costs.
Airlines in all regions recorded growth. Mr de Juniac is the former chief executive of Air France-KLM.
Middle East airlines will see net profits doubling to $600 million in 2018, up from the $300 million they made in 2017, according to IATA. That marked the 15th consecutive month with capacity gains.
Freight volumes are still expected to grow in 2018, although at a slower pace than in 2017.
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