The International Air Transport Association, IATA, has said growth in passenger traffic is set to slow to 5.1 percent in 2017 from an anticipated 5.9 percent this year.
The figure i less than the expected increase in capacity, so average seat-occupancy levels will slip below 80 percent. Even so, the industry group sees fares stabilizing as worldwide gross domestic product picks up, Bloomberg reports.
The global aviation body said what is of greater concern is an uneven distribution of earnings that suggests carriers in some regions are still far from sustainable.
Almost 61 percent of 2017’s net income will be concentrated in North America, with earnings of $18.1 billion down 11 percent versus 2016, IATA projects.
European airlines, by contrast, may see profit slump 25 percent to $5.6 billion, depressed by “intense competition” and the threat of more terrorist attacks, while the Asia-Pacific figure is likely to decline 14 percent to $6.3 billion.
The U.S. have benefited from a head start in consolidation, curbing supply and bolstering prices, according to De Juniac, who succeeded Tony Tyler as IATA chief this summer. European carriers are catching up “but still have a long way to go,” especially since they generally face higher taxes and charges, he said.
Airlines in the Middle East and Latin America will remain barely profitable in 2017, posting collective earnings of $300 million and $200 million respectively, IATA said. Africa will continue to trail the rest of the world with a forecast $800 million loss, about the same as expected this year.
