The International Air Transport Association (IATA) is expecting "high volatility" in oil and jet fuel prices to continue in 2020.

The association noted Brent crude oil rose to US$70 per barrel and jet fuel prices rose to US$84 per barrel during the increased period of tension between the US and Iran in early January, 2020.

Although the impact was short-lived IATA believes prices remain "vulnerable to intensified geopolitical risks".  

Brent crude is also currently priced at around US$58.50/bbl due to fears over the ongoing Coronavirus crisis.

The Financial Monitor detailing final financial results from Q3 2019 showed that overall, operating profitability among the world’s airlines improved compared to the year-ago period. However, airline share prices suffered as the global airline equity index increased by only 1.2% in December.

IATA noted that was in part due to the extended grounding period of the Boeing Max 737, which significantly affected North American airline operations.

"Despite the disruption, North American airlines delivered a solid operating profitability performance overall year-on-year, which IATA said was driven by strong travel demand and better yields," it added.

In contrast, rising operating expenses in Europe weakened airline EBIT margins while yields in the Asia-Pacific region suffered from “intense competition” and disruptions such as protests in Hong Kong.

IATA’s Q3 2019 Financial Monitor also found that passenger and freight load factors remained steady, although the latter is still feeling the effect of trade tensions around the world.

Passenger traffic continues to experience moderate growth, maintaining the trend in November, and cargo demand stabilized after a rough few months.

Both passenger and air freight capacity remain moderate compared to year-on-year figures.