The airline industry is expected to lose $7.4 billion this year as carriers face crippling fuel bills.
Chief executive of the International Air Transport Association Giovanni Bisignani said the cost of oil was “once again robbing the industry of a return to profitability.”
According to the Financial Times, North American carriers will face the brunt of the losses. IATA have predicted losses in the region of $8 billion for 2005 while European carriers will break even and Asia Pacific airlines are likely to make a profit of $1 billion.
The $7.4 billion is based on the average cost of crude oil over the past 12 months.
Fuel is now accounting for 25% of the total airline industry costs and is second only to labour costs, a fact emphasised by British Airways last week when is raised its fuel surcharge for the fifth time since May 2004.
Bisignani said “cost reduction and efficiency gains had never been critical.”
