It's downhill for airline profits as fuel price bites, IATA says

By Angus Whitley

Almost a decade of good times may be over for airlines worldwide.

The rising cost of fuel will eat into profits “significantly” from next year, Alexandre de Juniac, chief executive officer of the International Air Transport Association, said in Sydney on Thursday.


“We are probably at the peak of the cycle,” he said, addressing media before IATA’s annual meeting next week. “Next year will be less positive.”

Airlines will still report “solid profits” for 2018, although not at the level IATA previously expected, he said. The body in December forecast total net profits would be $38.4 billion this year, up from $34.5 billion in 2017, marking a ninth straight year of profits. Updated numbers will be released on Monday, he said.

If oil prices continue past $80 a barrel, “it will bite hard,” he said. Brent crude is currently at a more than three-year high of about $77 a barrel.

IATA represents about 280 carriers worldwide, or 83 per cent of total air traffic. It’s inevitable that airlines will have to pass some of the fuel burden onto passengers, de Juniac said.