Delta Airlines jets sit at terminal at Reagan National Airport outside Washington in this August 19, 2004 file photo. Delta Airlines' shares fell more than 22 per cent to an all-time low on September 12, on widespread market speculation that the No. 3 U.S. Airline was close to filing for Chapter 11 bankruptcy protection. - REUTERS
WASHINGTON (Reuters):
AIRLINES GLOBALLY will pay more than US$97 billion for fuel in 2005 but carriers in Europe could break even while those in Asia are expected to make money, a leading international trade group said on Monday.
The International Air Transport Association (IATA) announced a revised
industry loss forecast of US$7.4 billion for 2005 with oil prices at sustained record levels. That figure is up from US$6 billion in May.
"Oil is once again robbing the industry of a return to profitability, Giovanni Bisignani, IATA's director-general, said. "Cost reduction and efficiency gains have never been more critical."
OIL COMPANIES CRITICISED
Bisignani criticised oil companies for high prices and said the impact of Hurricane Katrina on supplies would preclude a quick recovery.
While European airlines are expected to break even and Asia Pacific carriers will make roughly US$1 billion, losses by North American carriers could exceed US$8 billion, the group said. U.S. aviation officials said on Friday domestic carriers could lose up to US$10 billion.
With a 12-month estimated oil price of US$57 per barrel for this year, the industry's fuel bill globally for 2005 will top US$97 billion. Fuel expenses, which include refinery costs, have more than doubled in less than two years and account for about 25 per cent of industry expenses.
"We fully understand the principles of supply and demand. But it is difficult to see this as anything other than a US$14-billion cash grab by the oil industry that is pouring salt into the wounds of a global crisis," Bisignani said.
"Moreover, the impact of Hurricane Katrina on fuel supplies and refinery capacity will only ensure that relief will not come soon," said Bisignani.
