IATA has exacerbated airlines profit forecast in 2019

Created on 17.01.2020 16:02

The International Air Transport Association (IATA) has reduced a profit forecast for the global aviation industry current year against the background of slowing in economic growth and global trade wars. According to the results of 2019, airlines net profit is expected to be $ 25.9 billion, which is $ 2.1 billion less than forecasted in June, and almost $ 10 billion lower than estimates published a year ago, according to the IATA press-release, writes Interfax-Kazakhstan.

“Slowing economic growth, trade wars, geopolitical tensions and social unrest, along with the continuing uncertainty surrounding Brexit, are creating much more complexional than expected conditions for airline activities,” said Alexander de Juniak, IATA Director General.

The new forecast implies an airline profit decrease by 14% compared to previous year. However, in 2020, IATA predicts a slight improvement, although it warns that proposals to introduce an aviation fuel tax related to concerns about carbon emissions are already undermining the demand for air transportations in several parts of Europe. The forecast is also overshadowed by uncertainty regarding the timing of the Boeing-737 MAX flights resumption. Particularly, fears are caused by the fact that the oversupply on the aircraft market would raise an air traffic, which would limit the airfare growth and negative impact on profit margins, which is projected at $ 29.3 billion in 2020.

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