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Learn why the airline industry Latin America faced a 2019 special, where socio-political turmoil was the main concern for its actors.
The International Air Transport Association (THERE IT IS) foresees a net profit of 29.300 million dollars in 2020 for industry, an improvement over the 25.900 millions of dollars for 2019. If this forecast is fulfilled, on 2020 the airline industry would mark 11 consecutive years in the black, but Latin America does not see such encouraging numbers.
world level
The forecast for the 2020 highlights some of the following aspects as important for the global industry:
- The return on invested capital is at 6,0% (an improvement over the 5,7% expected in 2019).
- The net profit margin is at 3,4% (higher than 3,1% from 2019).
- General revenues reach 872.000 millions of dollars (a 4,0% more regarding the 838.000 million dollars in 2019).
- The industry's operational expenses amount to 3,5%, until the 823.000 millions of dollars (compared to 796.000 million dollars in 2019).
- Passengers increase to 4.720 millions (a 4,0% more regarding the 4.540 million passengers in 2019).
- The tons of cargo transported are recovered up to 62,4 millions, an increase of 2,0% Over the 61,2 million tons transported in 2019, the lowest figure in the 3 last years.
- Strong economic scenario expected to support growth in air passenger demand (RPK) in a 4,1%, no change vs. 2019 (4,2%), but below the historical trend.
- The average profit per passenger will be 6,20 Dollars (compared to 5,70 dollars in 2019).
Passenger demand is expected (RPK) grow a 4,1% on 2020, practically unchanged from the 4,2% on 2019, where the factors of attention are the economic growth that a variation is expected 2.7%, fuel cost that should remain unchanged and downward and the employment generated by the industry would exceed the 2.95 millions of workers worldwide.
- The tourist expenditure associated with air travel will be 968.000 millions of dollars, a 7,3% more than 2019.
- Airlines are expected to contribute 136.00 millions of dollars to the coffers of the Governments in concept of taxes on 2020 (an increase of 5,2% with respect to 2019).
The results from Latin America
Despite these important global numbers, Latin America the 2019 had a very "strange" behavior where social and political factors have generated significant uncertainty in airlines, airports and the rest of the industry in the region.
The social unrest in Ecuador, Chile and Colombia generated large losses for the industry, which is translated into economic results for the area, but he would have better expectations 2020, as long as the return to stability is maintained.
Latin American operators would benefit 2020 of improvement in underlying economies and restructuring, so a return to the black numbers is expected next year with a small gain of 100 millions of dollars.
In addition to currency weakness in 2019, The region's economy has slowed sharply (0,2%) affected by the problems in Mexico, the recession in Argentina and a drop in the Venezuelan economy by around a third.
On 2020, Airlines will benefit from the rebound in growth in a 1,8% predicted by the IMF thanks to the economic strength in Brazil and Mexico, and softer falls in Argentina and Venezuela. This improvement revises upward the forecast for 2020, which estimates a benefit of 500 millions of dollars, compared to the expected loss of 400 million dollars in 2019.
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