Airline chiefs from around the world have begun gathering for their annual meeting against a background of increasing concern about a slowdown in demand just as carriers pile on capacity to exploit low oil prices.

Only a few months ago, this week’s International Air Transport Association symposium in Dublin looked set to be dominated by talk of record profits and a rush to add new routes and aircraft.

Now, evidence of ebbing demand is raising concerns within an airline industry committed to buying record numbers of new aircraft. The market for flights is being hurt even as cheaper jet fuel encourages carriers to offer some of the lowest fares in years.

Manufacturers are also feeling the pinch, with Airbus Group SE’s acknowledging Tuesday that an order dearth so far this year may be part of a wider trend, though one it said was inevitable given the size of outstanding order books.

IATA, which represents 260 airlines accounting for 83 of global air traffic, revealed Monday that global passenger traffic grew only 4.6 percent in April — the slowest pace since January 2015. Capacity gained 4.9 percent, so that, on average, aircraft flew with more seats empty.

The industry group said that while the March 22 terrorist attacks in Brussels, which closed the Belgian capital’s main airport, were partly to blame for the April numbers, a negative underlying trend may also be emerging.

“There are some longer-term clouds over the pace of demand growth,” IATA Chief Executive Officer Tony Tyler said. “The stimulus from lower oil prices appears to be tapering off. And the global economic situation is subdued. Demand is still growing, but we may be shifting down a gear.”

IATA, which forecast on Dec. 10 that airline earnings would jump 10 percent to a record $36.3 billion this year, spurred by cheap fuel and an expanding U.S. economy, will provide an update on its latest thinking on Thursday.

The group has estimated that 2015 earnings reached $33 billion — almost double 2014’s $17.4 billion — after traffic grew 6.5 percent, the most since the post-slump rebound of 2010, and planes flew more than 80 percent full.

Price War

European airlines including Deutsche Lufthansa AG and British Airways parent IAG SA have already said that they’ll rein in plans to increase capacity as the spate of terrorist attacks there begins to affect the public appetite for travel.

Even so, the region may see a price war this summer as carriers slash fares to defend market share, especially on short-haul routes where discounters led by Ryanair Holdings Plc are committed to adding dozens more planes.

Airbus’s chief salesman, John Leahy, said at a briefing in Hamburg, Germany, that demand for new planes has begun to ease, while suggesting that’s a “normal” trend after such a surge in orders over recent years. Fabrice Bregier, who heads the company’s planemaking unit, also said there are relatively few big sales campaigns underway right now.

Tough Sell

The European planemaker won deals for more than 1,000 jets last year, net of cancellations, compared with 92 on that basis in the first four months of 2016.

Airbus Chief Operating Officer Tom Williams also said it’s becoming tougher to sell the re-engined A320 Neo plane with oil so cheap, and that the company isn’t expending energy on looking at production rates beyond the planned 60 planes a month by mid-2019.

Leahy said the manufacturer may yet lift A320 above that figure, while adding that given Airbus’s overall backlog of more than 6,700 planes and the production challenge that represents, an easing off may be no bad thing. There’s already a four-year wait for Neo delivery slots, he said.

IATA said that the terrorist threat, cyber security and climate change will all be “high on the agenda” at its Dublin meeting.

©2016 Bloomberg L.P.

This article was written by Christopher Jasper and Andrea Rothman from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: The departures hall at Hong Kong International Airport. Airline executives are meeting in Dublin this week to discuss challenges including softening demand. Skift