IATA has downgraded its 2019 outlook for the global air transport industry to a $28 billion profit (from $35.5 billion forecast in December). That is also a decline on 2018 net post-tax profits that IATA estimates at $30 billion.
“This year will be the 10th consecutive year in the black for the airline industry,” said Juniac. “But margins are being squeezed by rising costs right across the board—including labor, fuel and infrastructure. Stiff competition among airlines keeps yields from rising.”
IATA said, “All regions are expecting a reduction in profitability with the exception of North America and Latin America.”
“North American carriers will deliver the strongest financial performance with a $15 billion post-tax profit (up from $14.5 billion in 2018). That represents a net profit of $14.77 per passenger, which is a marked improvement from just seven years earlier ($2.3 in 2012). Net margins, forecast at 5.5%, are down from 2018 levels, owing to higher-than-expected fuel costs and slowing growth. The limited downside in this region has been underpinned by consolidation, helping to sustain load factors (passenger plus cargo) above 65% and ancillaries, which limit the impact of higher fuel costs, keeping break-even load factors to 59.5%.”