Airline profits unlikely at December forecast level – IATA chief

Profits in the airline industry are unlikely to reach the record levels forecast in December due to a jump in fuel costs, the head of the world’s leading air transport group said on Thursday.

International Air Transport Association (IATA) Chief Executive Alexandre de Juniac said his organisation will issue fresh forecasts next week, and that airline profits were still likely to be robust.

The December projections were based on oil at 60 dollars per barrel, Juniac said. Brent crude is currently over 77 dollars per barrel, having risen roughly 15 per cent so far this year.

“We are probably at the peak of the (profit) cycle.

”Next year we don’t know yet but probably less positive,” Juniac said at a media event ahead of the organisation’s annual meeting starting on Sunday.

Airline operators such as Singapore Airlines Ltd and Malaysia’s AirAsia Group Bhd posted strong profits in the latest quarter ended March amid a tourism boom in the region.

In December, IATA predicted a record 38.4 billion dollars net profit for the airline industry in 2018, with 27.9 billion dollars coming from U.S. and European airlines.

IATA represents some 280 airlines comprising 83 per cent of global air traffic.

Juniac said higher fuel prices had not yet been passed on in fares and that infrastructure and labour costs as well as taxes were rising.