KUALA LUMPUR: Aviation experts anticipate 2019 may propel global airlines and the aviation industry to greater heights despite the uncertainty over the oil prices and regulatory issues.
The positive growth outlook is also seen in the local aviation sector as the industry had not experienced major turbulence throughout 2018.
The International Air Transport Association (IATA) said Asia-Pacific carriers are projected to record a staggering US$10.4 billion or 8.3 per cent net profit in 2019, from the projection of US$9.6 billion anticipated in 2018.
IATA chief economist Brian Pearce said the region would also expected to record net profit per passenger about US$6.15 or 3.8 per cent of net margin.
He said the projection would be derived from the region’s diverse market with strong growth from new low cost carriers (LCCs) entrants and outbound cargo from key manufacturing centres.
“Cargo revenue growth has slowed from 2017, but it remains positive for airlines in the region. Lower fuel cost, low levels of fuel hedging and strong regional economic growth would also support profitability in 2019 for the region,” he said.
On global airline industry projection, he said the sector’s net profit to be US$35.5 billion in 2019, slightly ahead of US$32.3 billion expected net profit in 2018.
“Passengers numbers are expected to reach US$4.59 billion from US$4.34 billion forecast in 2018. Cargo tonnes carried are also expected to reach 65.9 million in 2019 from 63.7 million forecast this year,” he said, adding that the projection is based on cautious optimism.
Despite the financial market volatility, Pearce said forecasters continue to expect economic growth in 2019, noting that the projection would still be good and supportive for the airline industry.
On the local front, fluctuation in fuel prices and foreign exchange, intense competition from regional peers and Gulf carriers, airspace and airport management disputes and stringent regulations for airlines as well as higher operating cost for commercial airlines has posed challenge for the local aviation sector last year.
However, Malaysia as part of the Asia Pacific region, is seen to benefit from the new growth, mildly bolstered by the current low fuel price and new policy measures.
“Jobs are still being created at a healthy rate, business investment is still rising, government fiscal policies are supporting growth and monetary policies are not yet holding growth back,” Pearce said.
He said IATA’s assumption for oil prices in 2019 will be around US$65 per barrel, which is significantly lower than 2018’s US$73 per barrel.
Pearce said airlines’ return on capital should stabilise in 2019 due to robust economic growth and lower oil prices, enabling airline industry to stabilise profitability next year.
“We forecast the industry will create value for its investors for the fifth consecutive year in 2019,” he said.
In July last year, Malaysia Airlines Bhd (MAB) received its sixth Airbus A350-900 extra wide-body aircraft for long-haul travel, which would be mainly use to serve the Kuala Lumpur-London route.
Currently the airline has the right size of widebody planes consisting of the A380 (six units), A350 (six units) and A330 (21 units) as well as narrowbody plane the B737 (48 units).
Low cost carrier AirAsia Group Bhd also in July last year, concluded a US$30 billion aircraft deal with Airbus involving 100 units of the A330neo twin-aisle plane for its long-haul operator, AirAsia X Bhd.