Sector Overview

Industry Developments and the Forecast for 2018


Thanks to the passenger demand growth starting from middle of 2017, airline companies’ load factor has increased and as a result, their profitability has affected positively. According to International Air Transport Association (IATA), it is expected that 1% of world Gross Domestic Product, corresponding 871 billion American Dollars, will be spent on air transport in 2018. This amount is 11% higher than expenditure on air transport in 2017.

Together with increasing volume of e-commerce, aviation sector has showed significant improvement not only on passenger side but also on cargo side as well. Airline industry makes a huge contribution to development of global economy due to increasing number of connections and falling air transport cost. According to IATA, compared to 20 years ago, the number of unique city pair connections is expected to have exceeded 21,000, more than doubled and real air transport cost to have been more than halved in 2018. Better performance of the industry provides substantial advantage to the companies within the sector and the governments also. In 2018, the tax revenue from airline industry to the governments is expected to be 133 billion American Dollars.

In 2018, rise in jet fuel prices has increased fuel expenses, biggest operational cost item in airline industry, and reduced profitability. Airlines companies, which focused on fuel efficiency, has replaced the high fuel consuming old aircraft with the fuel-efficient new aircraft. In 2018, commercial airlines are expected to take delivery of 1,900 new aircraft. Around half of these deliveries will replace old aircraft. In the wake of these deliveries, sector fleet structure have become more fuel efficient and younger.

According to IATA data, as a result of passenger demand growth and developments within the industry, global aviation capacity is expected to increase by 6.7%, demand growth rate is expected to be 7% and passenger load factor is expected to reach 81.7% in 2018. In the industry, total passenger carried is expected to increase by 6.5%, reaching to 4.4 billion while according to the General Directorate of State Airports Authority(DHMI), Turkish aviation market is expected to grow by 14% reaching to 158 million total passengers in 2018 and 177 million in 2020.