Il 2019 will not be remembered as a happy year for the airplane transport. Although demand is growing and flying has become indispensable for an increasingly large clientele, airline profits crumble one after the other and the performance of their shares on the Stock Exchange reports conspicuous collapses.
From the beginning of the year to mid-August, according to calculations made by the Sole 24 ore, the Lufthansa – which has not yet completely given up hopes of joining Alitalia – has lost 31,40% on the Stock Exchange. IAG (British Airways and Iberia) 31,2%, EasyJet 18,03%, Ryanair the 17,36%. Norwegian Airlines, forced to suspend many low cost flights for the crisis of the Boeing 737 Max, has even lost 67,5% on the stock market since the beginning of the year.
In just two days, following the Hong Kong airport blockade and the consequent cancellation of hundreds of flights, the Cathay Pacific lost 7%. In contrast there is only Air France-Klm, which has gained 7,28% on the Stock Exchange since the beginning of the year.
How do you explain the stock market crash of the airlines? Mainly with the fall in earnings resulting from the cost growth and from the consequent reduction in profitability, With the tariff war which holds up increasingly fierce competition, with rising fuel prices, with the strikes which have often crossed the sector due to job cuts and also with unpredictable geopolitical factors, such as the one that is paralyzing the Hong Kong airport. But the effects should not be underestimated trade war between the US and China and the damage it will also cause to airlines and is already causing Brexit, not to mention the Boeing 737 Max crisis, which has put many companies in great difficulty.
On balance, the profits of major airlines are mourning. Those of the German Lufthansa, which is not surprisingly also the most affected airline on the Stock Exchange, they accuse a 70% drop in the second quarter of the year. He also cries Ryanair, useful leathers are down 29%. And unfortunately it is not an isolated case.
So far the crisis in the skies has already brought 14 airlines to their knees, which have gone bankrupt, but the troubles are not over and the last part of 2019 does not bode well.
