Australian Aviation - July 2018

to support airlines disrupted by the
Intermediate Pressure Compressor
rotor issue on the Trent 1000
Package C engines. Further, the
engine maker said it had introduced
an inspection technique where the
engines would remain on the wing
while the work was done. Also, it said
first parts for a permanent fix were
expected to be available in late 2018.

• Bombardier Business Aircraft
  launched two new jets aimed at the
  large category segment of the market
  in the Global 5500 and Global 6500
  at the European Business Aviation
  Convention and Exhibition (EBACE)
  in late May. The Global 5500 is
  designed to fly 5,700nm with a top
  speed of Mach 0.90 seating up to
  16 people. Meanwhile, the Global
  6500 had a range of 6,600nm with
  the same Mach 0.90 top speed and
  a cabin capacity of up to 17 people.
  Both are powered by new Rolls-Royce
  Pearl engines, with entry-into-service
  expected by the end of 2019.

IATA WRAP
Ticket prices look set to rise in the
period ahead as the rising cost of fuel
threatens to crimp airline profits.

The International Air Transport

Association (IATA) has downgraded

its profit forecasts for calendar

2018, with airlines around the

world expected to collectively post a

US$33.8 billion profit in the current

year.

This latest outlook, published at the

IATA annual general meeting (AGM)

in Sydney in early June, was down

from its previous estimate for 2018 of

US$38.4 billion, as well as a decline

from the US$38 billion in profits

earned in the prior year.

The lowered expectations reflected

the “significant pressures from rising

fuel and labour costs”, with the full

year average cost of Brent Crude Oil

tipped to be about US$70 a barrel,

compared with US$54.9 a barrel in

2017.

IATA estimated fuel would

account for about 24 per cent of total

operating costs in 2018, up from 21.

per cent in 2017.

“The biggest challenge facing

airlines today is this acceleration in

costs,” IATA chief economist Brian

Pearce told reporters at the AGM.

“The space capacity in the OECD

economies has run out this year

so we’re starting to see inflation

pressures edge up. This is behind the

cost pressures that the industry is

facing.

“It will mean that air travel will be

more expensive this year than it was

last year.”

However, Pearce said the expected

increases in fares would be broadly

in line with the general rate of world

inflation, meaning the real cost of

air transport would be “roughly the

same”.

The estimated calendar 2018 total

profit equated to an average profit of

US$7.76 per passenger and a “thin”

4.2 per cent net margin, which IATA

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Debrief

The Qantas Group leadership

team was all smiles at

IATA – from left Jetstar Group

chief executive Gareth Evans,

Qantas Domestic chief

executive Andrew David,

Qantas International chief

executive Alison Webster and

Qantas Group chief executive

Alan Joyce.