IATA cuts 2019 airline profit forecast, sees stability in 2020

Airline profits are on course to fall faster than expected in 2019 as trade wars hit global commerce and broader confidence, the industry’s main global body said Wednesday, while predicting a modest recovery next year. Cutting its full-year net profit forecast to $25.9b, a 5.1% decline from 2018, the IATA said an improvement in 2020 was contingent on a “truce” in global trade disputes. In June it had forecast $28b in profit this year. “Trade wars produce no winners,” IATA Director General Alexandre de Juniac said. De Juniac also cited slower growth, Brexit and social unrest among factors that “all came together to create a tougher than anticipated business environment for airlines” in 2019. IATA slashed its full-year global revenue forecast to $838b from the $899b predicted in June and said it expected an improvement to $872b for 2020. “We’ve downgraded our forecasts for 2019 pretty much across the board,” chief economist Brian Pearce said. “It’s pretty clear that this has been driven mostly by the impact of trade wars.”<br/>