Monday, 02 June 2008
According to a report from the International Air Transport Association (IATA), the airline industry will face a worse crisis than in the aftermath of 9/11.IATA has warned that airlines can expect losses of $6.1 billion in 2008, in contrast to previous profits of $5.6 billion last year should oil prices continue to trade at $135 per barrel.
Speaking at the IATA annual general meeting today, chief executive, Giovanni Bisignani, admitted the industry was "struggling for survival", with 24 airlines having already folded this year, and also attacked the Civil Aviation Authority for being the "worst regulator”, as a result of imposing higher landing fees at Heathrow, a factor that will increase fares without a noticeable improvement in service.
"The situation is desperate and potentially more destructive than our recent battles with all the horsemen of the apocalypse combined."
The association added that going on the average price of $107 per barrel, fuel costs for the industry as a whole would increase by $40 billion to $176 billion. As a result of this, many airlines have recently raised fares, whilst others have increased add-on fees over the past month. Less fortunate carriers, including Maxjet, Eos and Silverjet have all called in administrators.
