Airlines are facing a further squeeze on profit margins due to higher costs, according to international airline body IATA.

Its warning comes as Ryanair announced that it expected its full year profit to be down around €100 million.

IATA’s latest financial monitor, covering the third quarter of the year, reveals airline passenger yields are under pressure, although yields in the less price-sensitive premium cabins are up.

Industry-wide revenue passenger kilometres was up 6.2% year on year in November, but capacity rises of 6.8% have outstripped rising demand, leading to a fall in the industry wide load factor to 80%, which was only the third fall in two years.

IATA warned there are signs that traffic growth is slowing due to a potential slowdown in global economic expansion.

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