Nigeria's ease of doing business raises Africa's air traffic by 7.5%

Posted December 07, 2017

Overall revenues are seen rising 9.4% y-o-y to US$824 billion in 2018. Passenger traffic (revenue passenger kilometers or RPKs) is expected to rise 6.0 per cent (slightly down on the 7.5 per cent growth of 2017 but still ahead of the average of the past 10-20 years of 5.5 per cent), which will exceed a capacity expansion (available seat kilometers or ASKs) of 5.7 per cent.

"The region's carriers face challenges to their business models, and from low oil revenues, regional conflict, crowded air space, the impact of travel restrictions to the U.S., and competition the new "super connector" [Turkish Airlines]", IATA said. "And the industry is ready to partner with governments to reinforce the foundations for global connectivity that are vital to modern life".

All regions are expected to post improved profits year-on-year in 2018 with the North American carriers leading the pack at US$16.4 billion, which is almost half of the collective bottom line.

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Airlines and airports could also use drones to help inspect aircraft and runways or even bird-shaped drones to chase off wildlife, thus improving safety and reducing cost.

"Demand for air freight grew by 5.9% in October. More routes are being opened", he told the IATA global media conference in Geneva, Switzerland. Airlines are achieving sustainable levels of profitability.

However, IATA said it was not concerned there was a pilot shortage after high-profile cancellations at Ryanair and American Airlines due to rostering issues and after some US airlines awarded high pay increases to pilots this year.

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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.

"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. "Many of them are in the hands of governments".

He said the benefits of aviation are compelling, with the industry supporting 2.7 million direct jobs and providing support for 3.5 percent of global economic activity. After all, global tourists traveling by air are projected to spend more than $750 billion next year, which marks a 15 percent increase in just over two years.

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