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African airlines expected to report $300m net loss in 2019 - Iata

Dec 12 2018 22:04

African airlines are expected to report a $300m net loss in 2019, according to the International Air Transport Association (Iata).

This would be a slightly improved from the $400m net loss in 2018.

The expected net loss per passenger is $3.51, making Africa the weakest region, as it has been over the past four years.

"Performance is improving, but only slowly. Losses are expected to be cut in 2019 as fuel prices decrease. The region benefits from higher-than-average yields and lower operating costs in some categories," Iata said in a statement on Wednesday.

"However, few airlines in the region are able to achieve adequate load factors to generate profits."

All other regions in the world are expected to report profits in 2018 and 2019.

Carriers in North America continue to lead on financial performance, accounting for nearly half of the industry's total profits.

According to Iata, financial performance is expected to improve compared to 2018 in all regions except for Europe, where improvement has been delayed by the high degree of fuel hedging.

Iata forecasts the global airline industry net profit to be $35.5bn in 2019, slightly ahead of the $32.3bn expected net profit in 2018 - revised down from $33.8bn forecast in June.

"Lower oil prices and solid, although slower, economic growth are extending the run of profits for the global airline industry, after profitability was squeezed by rising costs in 2018," Iata said in a statement.

It is expected that 2019 will be the tenth year of profit and the fifth consecutive year where airlines deliver a return on capital that exceeds the industry's cost of capital, creating value for its investors.
“We had expected that rising costs would weaken profitability in 2019. But the sharp fall in oil prices and solid gross domestic product (GDP) growth projections have provided a buffer," said Alexandre de Juniac, Iata's director general and CEO.

"So we are cautiously optimistic that the run of solid value creation for investors will continue for at least another year. But there are downside risks as the economic and political environments remain volatile."

iata  |  africa  |  airlines  |  aviation


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