Asian airlines en route to digital transformation

FOR one of the most unpredictable industries in the world, airlines have had a spell of good weather. 2017 was the third consecutive year the air transport industry generated a rate of return that exceeded its cost of capital, and the International Air Transport Association (Iata) expects 2018 to mark the fourth.

In the Asia-Pacific, the growth story continues on an upward trajectory. Asia-Pacific airlines are expected to generate a net profit of US$6.3 billion in 2017 for a net margin of 2.9 per cent, the second highest among the regions.

Home to three of the top five fastest growing passenger markets in the world - China, India and Indonesia - this is truly the region to be. But the good times are not without some dark clouds. Infrastructure constraints could hinder growth if not addressed by all stakeholders, competition continues to put downward pressure on profit, and rising fuel prices will be watched closely.