Global Airliners Predict $29bn Profit Windfall in 2020

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Global airlines are warming up for more profitable 2020 with the net profit already anticipated to hit $29.3 billion. The profit margin is an improvement of over $28 billion forecast for 2019.

The key performance drivers will include economic growth, cheaper fuel, new employments, and improved passenger and cargo traffic, a Guardian report revealed.

The International Air Transport Association (IATA), representing 290 airlines, released the forecast recently. Actually, economic performance in 2019 was weaker than had been anticipated at the time of the June forecast.

This aligns with weaker global Gross Domestic Product (GDP) growth of 2.5 percent, versus 2.7 percent forecast in June, and world trade growth of just 0.9 percent, down from 2.5 percent forecast in June.

These negative developments contributed to softer passenger and cargo demand and corresponding weaker revenue growth, as passenger yields fell 3.0 percent and cargo yields dropped 5.0 percent compared to 2018.

Operating expenses did not rise as much as anticipated; 3.8 percent vs. 7.4 percent June forecast, largely owing to lower-than-expected fuel costs; but this was not enough to offset the softness in revenue.

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