Global airline industry to record net profit of $29.3 billion in 2020: IATA

The International Air Transport Association (IATA) forecast that the global airline industry will produce a net profit of $29.3 billion in 2020, improved over a net profit of $25.9 billion expected in 2019 (revised downward from a $28 billion forecast in June). The net profit margin is forecast at 3.4% (up from 3.1% for 2019). The return on invested capital is forecast to be 6.0% (improved from 5.7% expected in 2019). Overall industry revenues are forecast to reach $872 billion (+4.0% on $838 billion in 2019). Alexandre de Juniac, IATA’s Director General and CEO, said,  “Slowing economic growth, trade wars, geopolitical tensions and social unrest, plus continuing uncertainty over Brexit all came together to create a tougher than anticipated business environment for airlines. Yet the industry managed to achieve a decade in the black, as restructuring and cost-cutting continued to pay dividends. It appears that 2019 will be the bottom of the current economic cycle and the forecast for 2020 is somewhat brighter. The big question for 2020 is how capacity will develop, particularly when, as expected, the grounded 737 MAX aircraft return to service and delayed deliveries arrive.”