The International Air Transport Association (IATA) has downgraded its industry outlook for 2012 primarily due to rising oil prices.
In a statement released today (March 20), the IATA said it expected airlines to turn a global profit of US$3bn in 2012, US$500m less than forecast in December (2011).
The downgrade is primarily driven by a rise in the expected average price of oil to US115 per barrel, up from the previously forecast US$99 per barrel.
However, several factors have prevented a more significant downgrade, the IATA said. These included no significant deterioration of the Eurozone crisis; an improvement in the US economy; cargo market stabilisation; and slower than expected capacity expansion.
IATA director general and CEO Tony Tyler said: '2012 continues to be a challenging year for airlines. The risk of a worsening Eurozone crisis has been replaced by an equally toxic risk - rising oil prices. Already the damage is being felt with a downgrade in industry profits to US$3bn.'
