Global airlines profits seen hit by oil costs

The International Air Transport Association has cut its forecasts for 2011 global airline profits because of the recent surge in crude oil prices.

Geneva-based IATA said on Wednesday that it had downgraded its forecast for industry net profits to $8.6 billion from the $9.1 billion it had estimated in December. That's a sharp 46 percent drop on the $16 billion earned by the industry in 2010.

IATA, which represents more than 240 airlines around the world, expects industry revenues of $594 billion.

Political unrest in Libya and the Middle East has pushed oil over $100 a barrel in recent weeks - significantly higher than the $84 a barrel that IATA used to make its December forecast. Fuel accounts for almost 40 percent of an airline's operating costs.