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Asian travelers poised to lift global airline earnings in 2019

Region's passenger numbers expected to rise 7.5% on higher incomes

Brisk growth in business passengers has aided profitability for ANA Holdings, a trend the Japanese carrier expects will continue next fiscal year.

TOKYO -- A soaring number of airline passengers, primarily from Asia, looks to send 17 of the world's top 20 carriers to higher pretax profit in fiscal 2019.

Combined pretax profit at the 20 companies is projected to grow 17% to $36.2 billion, rebounding from a 6% drop in fiscal 2018 to $31 billion, according to data from QUICK-FactSet. Sales are expected to climb 7% to $466.6 billion as each company takes in higher revenue. Demand for flights is outstripping additional seating.

Growth appears especially large in the Asia-Pacific region, according to the International Air Transport Association. Passenger numbers are pegged to rise about 7.5% in fiscal 2019 as more people take airplanes due to rising incomes. China Eastern Airlines, China Southern Airlines and Air China are each projected to see large profit gains. Singapore Airlines is expected to see a 15% increase in profit.

ANA Holdings and Japan Airlines also are on track for greater profit. Brisk sales of high-margin business class seats on long flights have improved profitability. ANA said that business class passengers increased about 10% on the year from April to September, while JAL's occupancy rate on flights to Europe in the same period rose 2.8 percentage points to 86.3%.

The Japanese carriers expect to maintain this momentum in fiscal 2019 and plan to bolster their transport capacity.

ANA will start service from Tokyo's Haneda Airport to Vienna in February and introduce the world's largest passenger jet, the Airbus A380, for flights from Narita Airport to Honolulu in May.

Political risks cloud the otherwise bright economic picture. Demand for business class seating will be hurt should tensions between the U.S. and China intensify, and passengers could decrease if geopolitical risks heighten.

"Falling demand would easily lead to a drop in profits as carriers strengthen their transport capacity," a securities analyst said.

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