The International Air Transport Association (IATA) forecasts 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, and marking the industry’s 11th consecutive year of overall profitability.
IATA says overall industry revenues should reach $872 billion next year, up 4 percent over the $838 billion now projected for 2019. Global carriers are expected to carry 4.72 billion passengers in 2020, up 4 percent over the current year, while cargo volumes are expected to rise 2 percent to 62.4 million tons.
Average global net profit per departing passenger will be $6.20 in 2020, up from $5.70 expected this year.
North American carriers are expected to see net profits next year drop slightly to $16.5 billion, represents a 6.0 percent net margin and a net profit of $16.00 per passenger. IATA says unit revenue and profitability are expected to decline in North America in 2020 as a result of a slowing economy and a significant increase in aircraft deliveries particularly with the expected return to service of the 737 MAX fleet.
The good news for global carriers is that slower-than-expected global economic growth in 2019 contributed to lower demand for crude oil, with prices averaging around $65 per barrel for Brent Crude, compared to $71.60 in 2018. Energy supplies will continue to be strong next year, boosting inventories and resulting in Brent Crude prices dropping further to $63/barrel in 2020, IATA says.
Jet fuel prices are also expected to dip, averaging $75.60 per barrel in 2020, versus $77 per barrel in 2019. The expected industry fuel bill of $182 billion will represent 22.1 percent of expenses, down from $188 billion, or 23.7 percent, of expenses in 2019, the organization says.
