The world’s airlines are forecast to deliver improved net profits of $29.3 billion next year after a “tough” 12 months, according to Iata.

The rise from $25.9 billion projected for 2019 comes as annual passenger carryings are expected to climb by 4% to 4.72 billion.

Overall industry revenues are forecast by Iata to reach $872 billion from $838 billion this year, helped by an expected dip in oil prices.

The expected industry fuel bill of $182 billion will represent 22.1% of expenses, down from $188 billion or 23.7% of expenses in 2019.

Iata director general and CEO Alexandre de Juniac said: “Slowing economic growth, trade wars, geopolitical tensions and social unrest, plus continuing uncertainty over Brexit all came together to create a tougher than anticipated business environment for airlines.

“Yet the industry managed to achieve a decade in the black, as restructuring and cost-cutting continued to pay dividends.

“It appears that 2019 will be the bottom of the current economic cycle and the forecast for 2020 is somewhat brighter.

“The big question for 2020 is how capacity will develop, particularly when, as expected, the grounded 737 Max aircraft return to service and delayed deliveries arrive.“

The value of the tourism spend associated with air travel will be $968 billion, up 7.3% over 2019, while the average return fare is expected to be $293 – 64% below levels a decade ago.

European carriers are anticipated to report a $7.9 billion net profit in 2020, up from $6.2 billion forecast for 2019.

Iata said: “Economic growth is forecast to pick up and, as a result of substantial cuts in expansion plans, capacity growth is expected to be moderate, helping to improve the supply-demand balance.”

But the airline trade body added: “The net profit per passenger is expected to be $6.40. This relatively good aggregate performance for the region hides a long list of airlines just breaking even or making losses, which is why there were a series of European airline failures in 2019.”

Iata said: “Airlines in North America continue to lead on financial performance, accounting for 65% of industry profits in 2019 and around 56% of aggregate earnings in 2020.

“Financial performance is expected to improve or remain the same compared to 2019 in all regions except for North America, where expected capacity growth owing to new aircraft deliveries could put pressure on earnings.”