The International Air Transport Association is lowering its forecast for the airline industry this year to $28 billion from $35.5 billion amid rising fuel prices and weakening world trade.

The Montreal-based IATA said Sunday that “margins are being squeezed by rising costs right across the board, including labor, fuel, and infrastructure.”

It said competition among airlines remains stiff and “weakening of global trade is likely to continue as the U.S.-China trade war intensifies,” primarily affecting the cargo business, although passenger traffic could also be hit if tensions rise.

IATA members meeting in Seoul also backed a plan that will cap net emissions of the greenhouse gas carbon dioxide from international aviation at 2020 levels. Airlines will have to spend money on carbon reduction measures elsewhere to offset excess emissions.

(AP)