Boost to aviation industry: IATA projects USD 28 billion profit in 2019
At a time when fuel prices in the international market have been volatile, the global aviation industry is projected to make a profit of $28 billion this year.
At a time when fuel prices in the international market have been volatile, the global aviation industry is projected to make a profit of $28 billion this year. However, this figure is lower than the earlier forecast of $35.5 billion, the International Air Transport Association (IATA) said.
The airline operators' body has cited the reason as weakening world trade and rising fuel for adversely impacting the business of the airlines globally. IATA said that profit per passenger would decline to $6.12 in 2019 from $6.85 last year. The overall costs of the airlines are likely to grow by 7.4 percent, better than a 6.5 percent rise in revenues last year. It said that the fuel bill of airlines is expected to rise to $206 billion, 25 per cent of average operating costs, PTI reported.
The fall in profit of the airlines is due to increase in fuel prices and weakening global trades. As the US-China trade tussle continues, the situation may remain same for the year, it said. Airlines in Asia-Pacific is the most-exposed region to weakness in world trade and cargo. The margins of the airlines are being squeezed by rising costs, including those related to labour, fuel and infrastructure, it said.
In 2018, over-supply of crude oil kept prices low, thereby benefiting the airlines across the globe to reduce cost. IATA forecast said that airlines and customers can generate $129 billion in tax revenues this year. The ongoing global trade tensions are also making things worse.
Over the year, airlines in India are facing financial crunch due to elevated oil prices and other factors.