IATA warn oil will damage airline recovery

The sharp increase in oil prices may cost the world’s airlines billions of pounds in losses this year and further damage the industry’s recovery after a series of setbacks, the head of the global air transport association said today.

“Last year we survived the four horsemen of the apocalypse – SARS, the conflict in Iraq, terrorism and the economy,” said Giovanni Bisignani, director-general of the International Air Transport Association, or IATA.

“Now a fifth horseman, the price of oil, could add up to $1bn (€800,000) dollars a month to our costs and deny us profitability yet again,” he said.

“If oil prices average 33 dollars a barrel, we break even,” he said about the state of the industry at the World Air Transport Summit in Singapore.

“At 36 dollars, we will lose over €3bn (€2.43bn).”

US light crude stood at 38.32 dollars a barrel today, about 10% down from a 21-year high of 42.45 dollars last week.