Airline profits to reach record heights before 2017 descent


GENEVA—The financial outlook for airlines is deteriorating with collective industry profit set to peak this year as the industry’s leading trade group downgrades its financial outlook.

Overcapacity, rising fuel costs and political turmoil are combining to spell an end to a five-year run of improving earnings, the International Air Transport Association, representing more than 200 carriers, said Thursday.

Airlines UAL, +0.43%LHA, +2.75%AAL, -1.23%LUV, -0.50%RYAAY, +2.06% are expected to deliver a combined record net profit this year of $35.6 billion, IATA said. That represents an increase from $35.3 billion last year, though a lower profit for 2016 than IATA forecast six months ago when the trade group projected total returns of $39.4 billion.

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