Representatives of global airlines are scheduled to meet in Seoul for the annual meeting of the International Air Transport Association (IATA) amid trade tensions, rising oil prices and a two-month-old grounding of the Boeing Co 737 MAX jetliner which threatens to put a halt to five years of strong profits in the cut-throat air travel industry.
Aviation bosses are converging on Seoul for this weekend’s summit which brings together IATA’s 290 member companies that make up 80 percent of global air travel.
“The last six months have been pretty tough for airlines," IATA Director General Alexandre de Juniac said ahead of the annual meeting.
“Rising costs, trade wars, and other uncertainties are likely to have an impact on the bottom line,” he added.
The Jun 1-3 summit is a chance to examine passenger and cargo trends: key barometers of consumer confidence and trade amid a faltering global economy.
IATA's most recent projection for US$35.5 billion in industry profits this year now looks unsustainable due to the falling cargo market and weaker passenger growth, and de Juniac has given a strong steer that the group would trim the forecast at the upcoming Seoul meeting.
The cargo slump, with volumes down 3.7 percent in April including a 7.4 percent fall in the Asia-Pacific, is a concern for big freight carriers like Cathay Pacific and the IATA summit host Korean Air Lines.
"We have really since the end of last year seen quite a deterioration of cross-border trade following the earlier round of tariff increases," IATA Chief Economist Brian Pearce said.
Aviation leaders maintain flying remains remarkably safe relative to other forms of transport. But the decision by China, the European Union, and others to ground the MAX before the United States opened an unusual split in the regulatory system, worrying airlines and plane makers.
