"The business environment for airlines has deteriorated with rising fuel prices and a significant slowdown in world trade," the group said in a statement. "Margins are being put under pressure by rising costs across the board."
IATA expects airline costs to increase by 7.4% this year and exceed expected revenue growth of 6.5%. This means that airlines will carry about 1
Rising trade voltages do not help either. They will most directly harm the freight industry, even if passenger traffic could fall, as people rethink holidays in some places and consumers spend more on imports.
IATA expects growth in freight demand to slow significantly. The growth in passenger demand for air travel will also slow down somewhat, albeit far less dramatically than that of freight.
"It's not easy to make money," said Alexandre de Juniac, IATA CEO, in a statement.
IATA found that the aviation industry is still in good shape. It will be the tenth profitable year in a row and the airlines have broken through the boom-and-bust cycle that has shaped their business for decades. The airlines have consolidated, the global economy has been strong and demand for air travel has been consistently high in recent years.
However, the industry warned that investors need to prepare for more difficult times.
"A decline in the trade environment no longer plunges the industry into a deep crisis," de Junac said. "But under the current circumstances, the industry's great achievement of creating value for investors with normal profitability is at risk."