IATA: rising fuel costs to squeeze airline profits this year
This year will see thinner profit margins globally for airlines as they start to feel the squeeze of rising jet fuel prices, trade group IATA says.
IATA says it will revise down its initial forecast of a $38 billion profit for the industry due to the pricing pressure, but the industry generally remains in good shape.
"In the past, such a rapid rise in a key input cost might have plunged the industry back into losses. As a result of the efforts of the industry to restructure and re-engineer their businesses, we are still expecting solid profits this year. But probably not at the levels we were anticipating in December," IATA director-general Alexandre de Juniac told reporters ahead of the group’s AGM in Sydney.
It will release an updated forecast for airline profits next week.
de Juniac said air passenger traffic is still rising, recording an overall 6.2% growth rate in April.
However that rate is down from March 2018.
IATA’s initial profit projections were made late last year when oil was priced at $60 per barrel.
It has risen about 15% since then.
Juniac said higher fuel prices have yet to be passed on in higher fares, while labor costs are also rising much faster than revenue growth.
US airline CEOs have already warned rising fuel costs will likely result in higher fares after the summer.
TravelMole Editorial Team
Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
TAP Air Portugal to operate 29 flights due to strike on December 11
Qatar Airways offers flexible payment options for European travellers
Airlines suspend Madagascar services following unrest and army revolt
Strike action set to cause travel chaos at Brussels airports
Digital Travel Reporter of the Mirror totally seduced by HotelPlanner AI Travel Agent