The global airline industry reduces its earnings forecast by more than a fifth | Business

The global airline industry is expected to record its lowest profits in five years due to rising fuel costs and weak global trade.

The International Air Transport Association (IATA), whose 290 members account for 82% of scheduled air traffic, cut Sunday by more than a fifth its profit forecasts for the entire sector this year .

Profits in 2019 are now expected to reach $ 28 billion (22.2 billion pounds), announced Iata, after forecasting $ 35.5 billion in December 2018.

This would also represent a drop from 2018, estimated by Iata at $ 30 billion, and would be the lowest since 2014.

Airlines leaders meeting in Seoul, the capital of Korea, face much worse prospects than at the Sydney meeting last year. Donald Trump's White House stepped up its trade dispute with China, while the US fleet builder Boeing 737 Max's downtime has resulted in increased costs, although Iata did not explicitly refer to this last crisis in its forecasts.

The 737 Max regulator has been grounded by regulators since March, after concerns were expressed about the operation of safety features in two fatal accidents. The general manager of Iata, Alexandre de Juniac, said last week that he was not expecting the plane to return to the skies before the month of August.

Iata on Sunday called on regulators around the world to work together to implement software fixes for planes after different countries banned the 737 Max from flying at different times. De Juniac told reporters in Seoul that "any split between regulators is in no one's interest".

Despite fierce competition between airlines and rising costs (oil prices are expected to be 27.5% higher in 2017 than 2017), the sector is expected to record a tenth consecutive year of profits since the financial crisis. Pbadenger numbers are expected to increase 5% year-on-year to 4.6 billion.

De Juniac said the sector had broken the cycle of "boom and bust" that previously left him more vulnerable to deteriorating conditions, but nevertheless said that "normal levels of profitability" were at risk.

The continuation of trade disputes between the United States and China poses a major threat to freight volumes, but the number of pbadengers could also be affected if relations continue to deteriorate, warned Juniac.