The International Air Transport Association cut its forecast for global airline profits in 2012 by $500 million to $3 billion because of sharply rising oil prices.
But the industry body said the air cargo market could stage a “moderate” upturn in the second half of the year after stabilizing at low levels in the fourth quarter of 2011.
IATA said it would have cut its December forecast of a $3.5 billion industry profit even more but for the firmer cargo market, the slower-than-expected expansion of capacity, an improving U.S. economy and the avoidance of a significantly worse eurozone crisis
“The risk of a eurozone crisis has been replaced by an equally toxic risk – rising oil prices,” said IATA chief executive Tony Tyler.
“It will not take much to push the industry into the red for 2012.”
Contact Bruce Barnard at email@example.com.