Airlines should turn over a profit of USD 29.3 billion profit in 2020, according to the latest International Air Transport Association (IATA) forecast. It would represent an improvement, over a net profit of USD 25.9 billion expected in 2019 (revised downward from a USD 28 billion forecast in June).
If achieved, 2020 would mark the global industry’s 11th consecutive year in the black. In 2020, the association expects a return on invested capital to be about 6%, as against the 5.7% expected in 2019; the net profit margin was forecast at 3.4%, up from 3.1% for 2019; and overall industry revenue was estimated to reach USD 872 billion this year, up from USD 838 billion in 2019.
In addition, the industry operating expenses were projected to climb by 3.5% to USD 823 billion, from USD 796 billion in 2019. IATA also expects passenger numbers to reach 4.72 billion, up by 4%, compared with the 4.54 billion realised in 2019.
“Negative developments contributed to softer passenger and cargo demand and corresponding weaker revenue growth, as passenger yields fell 3%, compared to 2018,” IATA reported.
“The big question for 2020 is how capacity will develop, particularly when, as expected, the grounded 737 MAX aircraft will return to service and delayed deliveries arrive,” said Alexandre de Juniac, director general and CEO of IATA.