US-China trade war ‘to knock US$7.5 billion off global airline profits’, says International Air Transport Association at Seoul conference
- Industry body says US-China tariff dispute, along with high cost of fuel, will mean combined profit of US$28 billion – US$2 billion less than 2018 – well down on expectations
- One airline has already grounded three cargo planes because of decreased freight demand, CEO says
The effects of the US-China trade war and high fuel prices will wipe US$7.5 billion (HK$58.8 billion) off expected airline profits during 2019, the industry body has said.
Carriers worldwide will collectively generate a profit of US$28 billion, down a fifth on estimates made at the end of last year, according to the International Air Transport Association (IATA) forecast, US$2 billion less than 2018.
“It’s a solid profit under challenging conditions,” Alexandre de Juniac, the IATA’s director general and CEO, said on Sunday at the industry’s annual conference in Seoul.
The partial blame for the Sino-US trade row – which has dragged on for about a year – came a day after Beijing’s 25 per cent tariffs on most of US$60 billion of US goods came into effect, in response to the US imposing 25 per cent levies on US$200 billion of Chinese goods last month.
“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,” de Juniac warned. But he noted demand for air travel remained “robust”.