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IATA predicts losses for African airlines

It's going to be yet another year of losses for African airlines — the fourth in a row — as the global airline industry braces for higher fuel prices and weaker global trade during 2019.

The projections are a cautionary tale for East Africa’s struggling airlines and new ones that are setting up in the region.

Releasing the mid-year airline industry economic forecast during its 75th AGM in Seoul on June 2, the International Air Transport Association (Iata) said airlines were expected to make a net profit of $28 billion during the year. This is 20 per cent lower than the $35.5 billion net profit that the association had forecast in its first outlook for 2019, last December.

“This will be the 10th consecutive year in the black for the airline industry. But margins are being squeezed by rising costs across the board, including labour, fuel and infrastructure. Weakening of global trade is expected to continue as the US-China trade war intensifies,” Iata director general, Alexandre de Juniac, said.

Despite the headwinds, Mr de Juniac said the industry has turned a corner; airlines have been in the black since 2010. The performance is not uniform, with some regions struggling more than others.

“But our sustained normal financial performance is a major shift from the boom and mostly bust cycles of the past,” he said.

Source: theeastafrican