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Is Trade War Between China-US Hurting Airline Revenues? – IATA Says YES

The IATA at the annual meeting of global airlines held in Seoul on 2nd of June said, the intensifying US-China Trade War as well as rising fuel prices will continue to bog down airline profits this year.

Is Trade War Between China-US Hurting Airline Revenues? – IATA Says YES
Is Trade War Between China-US Hurting Airline Revenues? – IATA Says YES

The International Air Transport Association (IATA) believes that the intensifying trade war between United States and China is hurting the profits of airline Industry.

The IATA at the annual meeting of global Airlines held in Seoul on 2nd of June said, the intensifying US-China trade war as well as rising fuel prices will continue to bog down airline profits this year.

The IATA also said that collective net profit for 2019 was forecast to be US$28 billion, down from an outlook of US$35.5 billion released in December.

Whys the financial performance of airline Industry is weakening?

IATA discovered that the rising costs of labour, fuel and Infrastructure are creating difficulties to attain profits.

The IATA further believed that the worsening trade war between the United States and China which are two World’s Largest economies is not helping airline industry.

“This year will be the tenth consecutive year in the black for the airline industry. But margins are being squeezed by rising costs right across the board—including labor, fuel, and Infrastructure. Stiff competition among airlines keeps yields from rising. Weakening of global trade is likely to continue as the US-China trade war intensifies. This primarily impacts the cargo business, but passenger traffic could also be impacted as tensions rise. Airlines will still turn a profit this year, but there is no easy money to be made,” said Alexandre de Juniac, IATA’s Director General and CEO.