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The International Air Transport Association (IATA) on March 20, 2012 announced a downgrade to its industry outlook for 2012 primarily due to rising oil prices. IATA says it expects airlines to turn a global profit of $3 billion in 2012 for a 0.5% margin. �This $500 million downgrade from the December forecast is primarily driven by a rise in the expected average price of oil to $115 per barrel, up from the previously forecast $99,� the association said in a statement. African carriers are still expected to see losses of $100 million, unchanged from the previous forecast, it observed as passenger and freight load factors are �very low on average for airlines in this region which will make it difficult to recover the rise in fuel costs.� �2012 continues to be a challenging year for airlines. The risk of a worsening Eurozone crisis has been replaced by an equally toxic risk�rising oil prices. Already the damage is being felt with a downgrade in industry profits to $3.0 billion,�� said Tony Tyler, IATA�s Director General and CEO. According to IATA, airline performance is closely tied to global GDP growth noting that historically, when GDP growth drops below 2.0%, the global airline industry returns a collective loss. �With GDP growth projections now at 2.0% and an anemic margin of 0.5%, it will not take much of a shock to push the industry into the red for 2012,� said Tyler. The association has therefore listed several factors that can prevent a more significant downgrade. The body listed the avoidance of a significant worsening of the Eurozone crisis; improvement in the US economy; cargo market stabilization and slower than expected capacity expansion. IATA said it has revised upwards its estimated profits for 2011 to $7.9 billion from the previously forecast $6.9 billion. This was primarily owing to the much better than expected performance of Chinese carriers, it added.