Airline profits are being squeezed this year, down 25 per cent on earlier estimates in a slowdown that's been felt around the world, including in New Zealand.

The International Air Transport Association today announced a downgrade of its outlook for the global air transport industry to a $US28 billion (NZ$42b) profit - down from $35.5b billion forecast in December last year.

Airline chiefs heard the business environment for airlines has deteriorated with rising fuel prices and a substantial weakening of world trade.

This year overall costs are expected to grow by 7.4 per cent, outpacing a 6.5 per cent rise