Airlines' ability to stimulate global travel demand with lower fares is expected to taper over the coming months.
The International Air Transport Association (IATA) outlined this scenario in light of rising airline cost pressures while business confidence softens.
Furthermore, rising trade protectionism and barriers to travel are worrying trends that, if unchecked, could impact demand, IATA director-general Alexandre de Juniac warned in a statement.
His statement came as IATA issued worldwide passenger traffic figures in May that saw slower growth than in April, but was still well ahead of the average growth rates in the past decade.
May passenger traffic volumes, as measured in revenue passenger kilometres, rose 7.7% from May 2016, lower than the 10.9% growth recorded for April.
Combined seat capacity in May climbed 6.1%, and load factor rose 1.2 percentage points to 80.1%, which was a record high for the month.
After adjusting for inflation, airfares at the start of the second quarter were around 6% lower than a year ago.
IATA estimates that this contributed to around two-fifths of the annual growth in passenger traffic seen in May.
However, the reduction in fares is around half that seen in the second half of 2016.
"Passenger demand is solid. We don't foresee any weakening over the busy summer months in the northern hemisphere," the IATA chief noted.
International passenger traffic demand rose 7.6% in May, with airlines in all regions recording growth, led by airlines in Africa for a second consecutive month.
Total capacity climbed 5.7%, with load factor rising 1.4 percentage points to 78.5%.
Domestic demand rose 7.9% in May from May 2016, down slightly from the 8.1% year-on-year growth recorded in April.
Results varied widely, with China, India, Japan and Russia showing double-digit percentage growth while other regions were in the low single-digit range.