IATA Revises Airline Profit Forecast

Global trade wars have contributed to the International Air Transport Association’s decision to revise its forecast for 2019 profits.

And not in a good way.

The airline trade group said its new forecast is for a full-year net profit of $25.9 billion, still a healthy figure but 7.5% less than the $28 billion it originally forecasted in July – and a 5.1% decrease from the 2018 total.

Trade wars between countries is the main culprit, IATA said.

“Trade wars produce no winners,” IATA Director General Alexandre de Juniac told an annual media briefing in Geneva.

De Juniac also said that slow growth, Brexit and social unrest among factors that “all came together to create a tougher than anticipated business environment for airlines” in 2019.

IATA slashed its full-year global revenue forecast to $838 billion from the $899 billion previously predicted and said it expected an improvement to $872 billion for 2020.

“We’ve downgraded our forecasts for 2019 pretty much across the board,” chief economist Brian Pearce said. “This has been driven mostly by the impact of trade wars.”

Net profit per passenger fell to $5.70 this year from $6.22, with the industry’s net profit margin expected to decline to 3.1% this year from 3.4% in 2018.