Rising Costs and Plane Shortages Overshadow IATA Summit

Airlines are entering the annual meeting of the International Air Transport Association (IATA) in Rio de Janeiro under significantly more pressure than anticipated just a few months ago. The conflict involving Iran has pushed up oil and aviation fuel prices while also restricting access to some airspace.

Carriers are trying to offset rising costs with higher ticket prices, but industry officials warn there is a threshold beyond which demand will begin to weaken. The situation is compounded by a shortage of new aircraft caused by delivery delays from Boeing and Airbus.

Many airlines are consequently having to extend the operational life of older, less fuel-efficient and more expensive aircraft. Although the premium and corporate segment remains strong for now, analysts expect the IATA to revise down its initial forecast of record profits for this year. The industry faces a combination of rising costs and growing uncertainty over future demand.

(reuters)