High fuel costs could cost the airlines $7bn in 2005
15.06.05
Rising oil prices could cost the aviation industry almost £4bn this year, a leading expert suggested this week. This see the worlds airlines as a group losing as much as $7bn in 2005.
Last year the worlds airlines collectively lost around $5bn, as oil prices climbed and remained high for the second half of the year. Unless aviation fuel costs fall dramatically over the second half of this year, avaition experts warned this week that losses will worsen in 2005.
BA and a number of other airlines introduced fuel surcharges in 2004, and have continued to raise the surcharge as prices have increase, in order to pass on part of the increased fuel costs to customers. Even with the surcharge not covering all of their increase in costs, BA made their highest profits for 10 years last year, and were the world's most profitable airline.
But just as Rod Eddington, BA's outgoing Chief Executive, was announcing these record profits last month, oil prices were rising again. 2005 looks like being another though year for the aviation industry, even for those airlines as profitable as BA.
