The International Air Transport Association (IATA) has expressed its concern over a resurgence in oil prices.
After two years of lower prices, the price of a barrel has recently been back around the $100 mark.
“We predicted that 2011 would see a consecutive second year of profitability, but with industry profits falling by 40% to $9.1 billion. This was based on an oil price of $84 per barrel (Brent),” said Giovanni Bisignani, IATA’s director general and CEO.
“Fuel accounts for 27% of operating costs and a sustained rise in the oil price could spoil the party. With uncertainties in the Middle East, oil prices are now hovering near the $100 per barrel mark.
“For every dollar increase in the average price of a barrel of oil over the year, airlines face the difficult task of recovering an additional $1.6 billion in costs.”
The rise in oil prices comes after what was a decent year for the aviation industry in 2010.
Worldwide, passenger numbers were up 8.2% year on year and cargo tonnage increased 20.6%.
Capacity increases were a lower 4.4% for passengers and 8.9% for cargo, meaning the industry was more efficient. The average passenger load factor for the year was 78.4%, a 2.7% percentage point improvement on 2009. The overall industry profit margin was 2.7%.
After two years of lower prices, the price of a barrel has recently been back around the $100 mark.
“We predicted that 2011 would see a consecutive second year of profitability, but with industry profits falling by 40% to $9.1 billion. This was based on an oil price of $84 per barrel (Brent),” said Giovanni Bisignani, IATA’s director general and CEO.
“Fuel accounts for 27% of operating costs and a sustained rise in the oil price could spoil the party. With uncertainties in the Middle East, oil prices are now hovering near the $100 per barrel mark.
“For every dollar increase in the average price of a barrel of oil over the year, airlines face the difficult task of recovering an additional $1.6 billion in costs.”
The rise in oil prices comes after what was a decent year for the aviation industry in 2010.
Worldwide, passenger numbers were up 8.2% year on year and cargo tonnage increased 20.6%.
Capacity increases were a lower 4.4% for passengers and 8.9% for cargo, meaning the industry was more efficient. The average passenger load factor for the year was 78.4%, a 2.7% percentage point improvement on 2009. The overall industry profit margin was 2.7%.
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