High oil prices to nearly halve airline profits: IATA

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High oil prices will cut airline industry profits by nearly half this year to $8.6 billion, the International Air Transport Association said on Wednesday.

In a revised profit forecast, IATA said it was downgrading its airline industry outlook for 2011 to $8.6 billion from the $9.1 billion it estimated in December.

"This is a 46 percent fall in net profits compared to the $16 billion earned by the industry in 2010," IATA said in a statement.

"The biggest shift in our forecast is the price of oil," IATA director general Giovanni Bisignani told reporters.

"Profits will be cut in half compared to last year and margins are a pathetic 1.4 percent," he said.

Airlines are expected to face a fuel bill for $166 billion on revenues of $594 billion.

© 2011 AFP

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