File Photo: An airplane prepares to land at Cointrin airport in Geneva, Switzerland Photograph:( Reuters )
Airline net profits are now expected to fall to $25.9 billion from $27.3 billion last year, before recovering to $29.3 billion in 2020, the International Air Transport Association said
Global airlines reduced a forecast for industry-wide profits in 2019 under the weight of trade tensions but predicted a modest recovery next year on the assumption that tariff wars will recede in the run-up to the US presidential election.
Airline net profits are now expected to fall to $25.9 billion from $27.3 billion last year, before recovering to $29.3 billion in 2020, the International Air Transport Association said. In June it had forecast $28 billion in profit for 2019.
The starkest deterioration is being felt in airlines' cargo businesses where a 3.3 per cent drop in freight demand marked the sharpest decline since the 2009 financial crisis, with revenue down 8 per cent year-on-year.
Growth in world trade has all but evaporated to an expected 0.9 per cent this year, sharply down from the 2.5 per cent forecast in June and the 4.1 per cent expansion predicted a year ago, IATA said.
Underpinning the partial recovery predicted next year, IATA forecast more robust trade growth of 3.3 per cent as "election-year pressures in the US contribute to reduced trade tensions".