Tinubu: Physical, Verbal Assault During the March 18 Governorship, States Assembly Elections, Unacceptable
Quilombola, Yoruba Heritage, Says Ooni
Davido Curates Timeless Afro Playlist on Spotify
IATA Projects Global Industry Profit of $35.5bn in 2019
The International Air Transport Association (IATA) has projected that the global airline industry net profit will hit $35.5 billion in 2019, slightly above the $32.3 billion expected net profit in 2018.
This was revised down from $33.8 billion that was forecast in June last year.
The factors expected to drive the projection of the global body includes the return on invested capital, which was expected to be 8.6 per cent, unchanged from 2018; the margin on net post-tax profits expected to be four per cent, also unchanged from 3.9 per cent recorded in 2018.
Another factor was the overall industry revenues which was expected to reach $885 billion (+7.7% on $821 billion in 2018)
Passenger numbers was expected to reach 4.59 billion, up from 4.34 billion in 2018; cargo tonnes carried expected to reach 65.9 million, up from 63.7 million in 2018 and that there would be slower demand growth for both passenger traffic (+6.0% in 2019, +6.5% in 2018) and cargo (+3.7% in 2019, +4.1% in 2018) and there also be average net profit per departing passenger of $7.75 ($7.45 in 2018),” the global body said.
It noted that the lower oil prices and solid, albeit slower, economic growth (+3.1%), were extending the run of profits for the global airline industry, after profitability was squeezed by rising costs in 2018.
It is expected that 2019 would be the tenth year of profit and the fifth consecutive year where airlines deliver a return on capital that exceeds the industry’s cost of capital, creating value for its investors.
“We had expected that rising costs would weaken profitability in 2019. But the sharp fall in oil prices and solid GDP growth projections have provided a buffer. So we are cautiously optimistic that the run of solid value creation for investors will continue for at least another year. But there are downside risks as the economic and political environments remain volatile,” said IATA’s Director General and CEO, Alexandre de Juniac.
The global body said Passenger traffic (RPKs) was expected to grow by six per cent in 2019, which would outpace the forecast capacity (ASKs) increase of 5.8 per cent and remains above the 20-year trend growth rate.
This in turn would increase load factors and support a 1.4 per cent increase in yields (partially clawing back the 0.9% fall experienced in 2018).
Passenger revenues, excluding ancillaries, were expected to reach $606 billion (up from $564 billion in 2018).