IATA outlines main performance drivers for the airline industry in 2019

IATA outlined (12-Dec-2018) the following performance drivers for the global airline industry in 2019:

• Economic growth: GDP is forecast to expand by 3.1% in 2019 (below the 3.2% expansion in 2018). IATA said the "slower but still robust growth" is a main driver of continued solid profitability. IATA noted significant downside risks to growth from trade wars and political uncertainties, such as Brexit, but the consensus view is that these factors will not offset the positive impetus from expansionary fiscal policy and growing business investment in major economies;
• Fuel costs: IATA's 2019 industry outlook is based on an anticipated average oil price of USD65 per barrel (Brent), which is lower than the USD73 per barrel experienced in 2018, following the increase in US oil output and rising oil inventories. IATA said: "This is welcome relief for airlines" and added that jet fuel prices are expected to average USD81.3 per barrel in 2019, lower than the USD87.6 per barrel average for 2018. The association said the full impact of the decline will be delayed due to heavy levels of hedging in some regions. Fuel is expected to account for 24.2% of the average airline's operating costs in 2019, an increase from the 23.5% forecast for 2018;
• Labour: Total employment by airlines is expected to reach 2.9 million personnel in 2019, up 2.2% from 2018. Wages are also rising, reflecting the tightness of labour markets, and it is expected that unit labour costs will increase by 2.1% in 2019 after a long period of stability. IATA said: "Aviation jobs are getting more productive" and the association expects productivity to increase 2.9% to 535,000 ATKs per employee in 2019;
• Passengers: RPKs are expected to grow 6% in 2019, which will outpace the forecast ASKs increase of 5.8%, and remain above the 20 year trend growth rate. This in turn will increase load factors and support a 1.4% increase in yields. Passenger revenues, excluding ancillaries, are expected to reach USD606 billion, up from $564 billion in 2018;
• Cargo: The expected 3.7% increase in cargo tonnage to 65.9 million tonnes in 2019 is the slowest pace since 2016, which IATA said reflects the weak world trade environment impacted by increasing protectionism. Cargo yields are expected to grow by 2%, well below the "exceptional" 10% yield growth in 2018. Overall cargo revenues are expected to reach USD116.1 billion, up from USD109.8 billion in 2018. [more - original PR] [more - original PR - II] [more - original PR - III] [more - original PR - IV]