Building a world of
resilient communities.

MAIN LIST

 

Airlines to lose up to US$4B this year due to oil price hikes

MONTREAL - The global airline industry stands to incur losses of between $3 billion and $4 billion this year as surging oil prices wipe out any hope of profit created by rising passenger traffic, the International Air Transport Association (IATA) said on Monday.

IATA expects domestic and international airlines to spend $10 billion more on fuel than forecast this year, a 25 percent increase that comes as carriers remain weakened by three years of crises.

"This will create tension in the industry, because after $30 billion (in losses), another year with a loss between $3 billion and $4 billion is very, very dramatic," IATA Director General and Chief Executive Giovanni Bisignani said.

As recently as two months ago, Bisignani expected the industry could break even or post a small profit this year.

The head of Montreal-based IATA said carriers can pass along only a fraction of the extra costs to passengers, because overcapacity in the industry is keeping downward pressure on prices.

The spike in fuel prices comes as airlines are still recovering from a series of setbacks, including the Sept. 11, 2001, attacks on the United States, the SARS outbreak in Asia and the war in Iraq.

World air passenger traffic rose 18.7 percent in the first eight months of the year, while cargo movements increased 14.2 percent, IATA said.

But compared with 2000, the year before the suicide hijackings in the United States sent the industry into crisis, passenger traffic was only 8.4 percent higher from January to August.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Make connections via our GROUPS page.
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

Tags:  

Is This The End Of China’s Coal Boom?

“The End Of China’s Coal Boom,” is a new, must-read …

The Age of Diminishing Returns

A Q&A with Ugo Bardi, author of Extracted: How the Quest for Mineral …

Energy Crunch: The end of business as usual for fossil fuels?

It’s the end of business as usual for fossil fuels. That’s …

Peak oil notes - April 17

A mid-week update. Oil prices in London have risen this week on concerns …

Climate Panel Stunner: Avoiding Climate Catastrophe Is Super Cheap — But Only If We Act Now

The U.N. Intergovernmental Panel on Climate Change (IPCC) has just issued …

Kashagan – Back to the drawing board?

The recent shutdown of Kashagan oil field in Kazakhstan represents one …

King Coal Is Dying a Slow Death in America

In cities choked by pollution and a world coming to grips with the realities …