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By Jamie Freed and Heekyong Yang
SEOUL (Reuters) – International airlines slashed their major earnings forecasts for the sector by 21 percent on Sunday amid concerns over a growing trade war and rising oil prices.
The International Air Transport Association, which represents about 290 carriers, or more than 80% of global air traffic, said the industry is expected to post a profit of $ 28 billion in 2019, down from the forecast of 35, $ 5 billion planned in December.
"The airlines will continue to generate profits this year, but there is no easy money to win," IATA The general manager, Alexandre de Juniac, said at the group's annual meeting in Seoul. "Protectionist or isolationist creeping political agendas are on the rise," he added.
Economists say the benefits of airlines help detect trends in consumer confidence and global trade.
Global stock markets collapsed on Friday after US President Donald Trump threatened Friday to introduce tariffs on Mexican products, which heightened fears of an escalation of trade wars that would push the United States United and other major economies in recession.
Airlines had announced annual profits of $ 30 billion in 2018, but conditions in the air cargo market – an additional source of revenue for carriers – have weakened considerably.
"You see that international trade is currently experiencing zero growth, so there is an immediate impact on our freight business," Juniac told Reuters TV.
IATA expressed concern over the trade tensions that forced several carriers to force air carriers to the ground, could spread to the pbadenger market.
Pbadenger capacity growth, which reached 6.9% in 2019, is expected to slow to 4.7% this year, with average fares remaining stable after a decline of 2.1% in 2018.
(Report by Jamie Freed, Tracy Rucinski, Heekyong Yang, edited by Tim Hepher)
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