Higher oil prices and the turmoil in credit markets will result in a fall in airline profits from $9.6 billion to $7.8 billion during 2008, according to IATA.
Weaker economic activity could also lead to a drop in profit, which had been steadily rising since the crash following the September 11 terrorist attacks.
“If the credit problems result in major losses at financial institutions there could still be significant damage to the outlook, particularly in the US,” IATA said.
Different approaches to carbon trading in the airline industry between the US and Europe could also lead to damaging legal and diplomatic disputes between the two regions, with few environmental gains, the association said.
- Read the PDF of IATA’s forecast for 2008.