The Strategist

IATA: Revenues of airlines will rise to record $ 885 billion in 2019

12/13/2018 - 11:16

The International Air Transport Association (IATA) expects that 2019 will be successful for the global aviation industry: net profit of airlines will grow by 9.9% to $ 35.5 billion, while revenue will turn out to be record - $ 885 billion. The forecast is based on expectations of lower fuel prices and global GDP growth of 3.1%. According to IATA experts, economic and political risks may have a significant impact on results of airlines in the next year.

The net profit of world airlines next year will grow by 9.9% to $ 35.5 billion, while the revenue will be record, reaching $ 885bn, the International Air Transport Association (IATA) said on Wednesday at its annual press conference. Thus, the global aviation industry will maintain profitability for the tenth consecutive year, and this will be the longest such period in history.

IATA associates good financial performance of airlines in 2019 with expected reduction in fuel prices (for example, the price per barrel of Brent crude oil is projected to decline from $ 73 this year to $ 65 next), as well as a 3.1% increase in global GDP.
The number of passengers will also grow - by 5.6%, to 4.6 billion people. This year, airline profits, by contrast, declined amid rising costs — from a record $ 37.7 billion in 2017 to $ 32.3 billion. The share of fuel costs in total airline costs in 2019 will remain at 24%, while these expenses will increase from $ 180 billion to $ 200 billion due to an increase in the number of flights.

“We are cautiously optimistic that the continuous chain of creating added value for investors will continue for at least one more year. But there are also risks, since the economic and political situation remains unstable,” said Alexandre de Juniac, IATA Director General, at a press conference. The profit of European airlines in 2019 will slightly decrease - to $ 7.4 billion, including due to the continued growth of costs and the UK exit from the EU.