The head of a body which represents nearly 300 global airlines has heralded the end of boom and bust while slashing his outlook for the industry by more than a fifth.
The International Air Transport Association (Iata) said it expects airlines’ combined profit to fall to $28bn (£22bn), over 21 per cent below a December estimate, as fuel prices rise and global trade weakens.
It also falls under 2018’s estimated post-tax profits of $30bn, the organisation said.
“Margins are being squeezed by rising costs right across the board – including labour, fuel, and infrastructure. Stiff competition among airlines keeps yields from rising,” said Iata chief executive Alexandre de Juniac.
Oil prices have risen since the beginning of the year, after months of decline towards the end of 2018.
The group said it expects oil to be slightly below last year’s price of $71.60 per barrel for Brent crude in 2019. This afternoon the price lay at $64.47 after a week of decline.
The industry has also been hit by weaker global trade, which is set to continue amid a trade war between the US and China.
“The good news is that airlines have broken the boom-and-bust cycle. A downturn in the trading environment no longer plunges the industry into a deep crisis. But under current circumstances, the great achievement of the industry – creating value for investors with normal levels of profitability is at risk,” de Juniac said.
It comes as a series of airlines have struggled in recent years. in 2017 Monarch collapsed, and it has been joined by Primera and Air Berlin.
The group today also appointed Lufthansa chief executive Carsten Spohr as its new chair.