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Global airlines slash profit forecasts on trade war fears

Video Credit: Reuters Studio - Duration: 01:29s - Published
Global airlines slash profit forecasts on trade war fears

Global airlines slash profit forecasts on trade war fears

Global airline profits will be around a fifth lower than forecast as trade tensions and higher oil prices take a toll.

Julian Satterthwaite reports.

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2019 doesn't look so good for the world's airlines.

Global industry body IATA says its members' profits will be a fifth lower than forecast earlier.

About 28 billion dollars instead of the 35.5 billion predicted back in December.

The IATA chief revealed the downgrade at the body's annual conference, which wrapped up Monday (June 3) in Seoul.

(SOUNDBITE) (English) DIRECTOR GENERAL OF INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA), ALEXANDRE DE JUNIAC, SAYING: "First of all, we have seen the consequences of trade wars and protectionist measures, particularly on our cargo business from a microeconomic standpoint.

You see that the international trade is now at zero growth rate, so immediate impact on our cargo business." Higher oil prices are hurting too.

Then there's Boeing's 737 MAX 8.

The jets still grounded after two fatal crashes.

And it's still unclear when they might fly again.

Over the weekend airlines called on global regulators to work together on a plan.

They fear different decisions around the world could just sow confusion.

IATA didn't cite the jets in its outlook, but said the grounding put the industry's reputation in question.

And it's costing airlines a fortune.

Some are seeking compensation from Boeing, or changing their plans.

On Monday airlines in Azerbaijan and Malaysia said they were in talks about delaying delivery of the MAX jets they ordered.




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