The global aviation industry is experiencing strong headwinds this year due to rising costs and slower demand. Six months ago, the World Aviation Association (IATA) had forecast surging profits, but now reduced that forecast by a good fifth, predicting a decline of almost seven percent to $ 28 billion (€ 25 billion) over the previous year.
„The business environment for the airlines has deteriorated in the face of rising fuel costs and weaker world trade,“ IATA said yesterday at its 75th Annual General Meeting in Seoul. However, according to IATA, the industry is better armed against the effects of trade crises than before.
While the airline industry will see profits again for the tenth year in a row, the association, which is also coming under increasing pressure from growing demands for emissions reductions, said that there was a „cost increase“ in all sectors, including labor, fuel and infrastructure „, Said IATA boss Alexandre de Juniac. The development depresses the profit margins.
Trade disputes as a risk
Another major risk for the aviation industry is the growing trade disputes. „The slowdown in world trade is likely to continue as the trade conflict between the US and China intensifies,“ it said. Although this affects first and foremost on the air freight business, but also the air travel should not escape harmless.
„The good news is that the airlines have broken the ‚boom‘ and ‚bust‘ cycle,“ said General Manager De Juniac. That is, a decline in trade would not entrain the aviation industry at the same time in a deep crisis, the Frenchman was confident.
