SYDNEY -- Rising fuel prices have led IATA to revise
downward its airline profit forecast for 2018.
Airlines globally will earn a net profit of $33.8 billion
this year, IATA predicted in the revised forecast, which it released Monday
during its Annual General Meeting here. That compares with the forecast IATA
put out in December projecting a $38.4 billion profit.
Last year, the airlines worldwide made $38 billion.
IATA projects that U.S. airlines will earn net profits of $15
billion this year, down from $18.4 billion in 2017.
"I want to be clear that there has been no dramatic
downward shift in airline profits since 2017," IATA general secretary
Alexandre de Juniac said at the conference. But he acknowledged that macroeconomic
conditions are more difficult this year than they were in 2017.
Fuel was trading at $65.90 per barrel on Sunday night, up
41% year over year.
IATA projects that jet fuel prices over the course of this
year will average 25.9% more than last year.
Countering the increasing costs will be a projected 7% jump
this year in air passenger traffic.
IATA said that several geopolitical issues pose risks to the
industry, including uncertainty over how Brexit will impact Europe-U.K. flying
and growing protectionism.
Trade disputes brought on by the recent U.S. introduction of
steel and aluminum tariffs could also pose a problem.
"When you put up barriers to trade, it's bad news for
passenger traffic," de Juniac said.