Air transport slows in 2019 by trade wars and social tensions

Airlines announced on Wednesday (11) that they were hit hard in 2019 by trade wars and social tensions, with net profits well below expectations, even if they remain operating in blue. Freight activity, in turn, is weaker since the 2008-2009 financial crisis. The air transport sector reportedly generated net income of $25.9 billion in 2019, down 7.5% from the last June forecast, when Iata (an entity that brings together companies in the sector) had already revised its forecast from 21% to up to $28 billion , announced the organization, which brings together 290 members and represents 82% of global air traffic. In 2018, profits reached $27.3 billion, with revenue per passenger of $6.22, compared with $5.70 in 2019 and a forecast of $6.20 for 2020. The sector will remain in the blue in 2019 for the tenth consecutive year, with 2015 and 2016 the best years in this period. For 2020, Iata expects a net profit of $29.3 billion, betting on "a recovery in international trade of 3.3%, compared with 0.9% in 2019" with "a truce" in trade tensions, in "a year of elections in the United States and an oil price that should "remain relatively low". "The slowdown in economic growth, geopolitical tensions, social unrest and persistent uncertainty about Brexit have created a more difficult-than-expected environment for airlines," Iata Director-General Alexandre de Juniac said in press conference. In an unpromising context, it is the air freight that suffered the most and demand in 2019 was "the weakest since the 2008-2009 financial crisis," said Brian Pearce, the organization's economist. Boycott For 2020, the organization expects a 4.1% growth in passenger traffic, compared with 4.2% in 2019, while traffic could double by 2037 to reach 8.2 billion air passengers. According to Pearce, the organization has not yet detected an impact on traffic in Europe from the plane boycott movement initiated by young Swedish activist Greta Thunberg. "We can't detect" an effect on traffic, "but what could have slowed traffic in Europe is taxes (on airfares). In the future, this (boycott of the plane) will be an issue in the wealthiest countries. Traffic growth will come from Asia. Europe is a relatively mature market," he said. Despite the trade war between the United States and China, air traffic has experienced the greatest growth in this country. In October 2019, in 10 months, it recorded an 8.5% increase in domestic traffic compared to the same period in 2018. European markets, with strong growth in eastern countries, and the Asian market, also recorded strong growth between 7% and 8%. In terms of financial revenue, U.S. companies, accounting for 65% of the sector's profits in 2019, will remain the best, according to Iata. In the European market, much less consolidated, at least a dozen companies have been swept off the map in the last two years, according to Iata. "There is a fragility of airlines in general and several European companies in particular. It is not possible to exclude the possibility that more companies will face difficulties in 2020" in a sector where "competition is very strong and where it is expensive to operate," according to Juniac.