This Year Was Disappointing for Airlines, 2020 Looks Brighter -IATA
12 December 2019 - 4:44AM
Dow Jones News
By Olivia Bugault
Airlines' performance will be weaker than expected in 2019, hit
by a tough economic environment and continued uncertainties, but
2020 looks "somewhat brighter," the International Air Transport
Association said.
Net profit for the airline industry worldwide should come in $2
billion lower than initially expected at $25.9 billion, IATA's
revised forecast showed.
"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," IATA's Chief Executive Officer Alexandre de Juniac
said.
North American airlines should keep outperforming their peers in
2019, with profits accounting for 65% of the industry's total
profit, a trend that will also continue over the next year,
according to IATA estimates.
Airlines in this region are expected to earn a total estimated
net profit of $16.9 billion in 2019, more than twice as much as
every other region.
Europe should take the second spot with $6.2 billion of net
profit in 2019, a steep drop compared to $9.1 billion the prior
year, according to IATA.
European airlines have been struggling with Brexit, several
warnings and bankruptcies this year. German carrier Deutsche
Lufthansa AG (LHA.XE), Ireland-based Ryanair Holdings PLC (RYA.LN)
and low-cost easyJet PLC (EZJ.LN) are among the EU airlines that
issued warnings this year.
Global airlines' financial performance should improve next year
with a total net profit of $29.3 billion--including $16.5 billion
from North American airlines.
Uncertainties remain however. "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,"
Mr. de Juniac said.
Write to Olivia Bugault at olivia.bugault@wsj.com
(END) Dow Jones Newswires
December 11, 2019 12:29 ET (17:29 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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