03/20/2012 05:43 EDT | Updated 05/20/2012 05:12 EDT

Airlines group dims profit outlook to $3 billion in 2012 as fuel prices rise

GENEVA - The global aviation industry has dimmed its profit outlook further, with officials cutting their earnings forecast for 2012 by a half-billion dollars to $3 billion.

The International Air Transport Association says a sharp rise in oil and fuel prices is behind the downgrade from its December forecast for $3.5 billion in net profits.

Tony Tyler, the Geneva-based trade group's chief executive, said Tuesday the profit outlook could turn to losses of more than $5 billion in 2012 if oil prices spike to $150 a barrel due to Western tensions with Iran.

He told reporters, however, that fears for $8.3 billion in losses — in the event the eurozone crisis veered toward catastrophe — are no longer warranted.

IATA revised its profits for 2011 to $7.9 billion, from $6.9 billion.