Airlines brace for further turbulence
SYDNEY – As the price of oil surged towards USS100 per barrel in overnight trade, the aviation industry was bracing itself for further after-shocks.
In its daily media hotline, the Centre for Asia Pacific Aviation said the fallout of the US sub prime mortgage crisis and worries over the outlook for the US economy continued to rattle investors.
“In Asia, the impact has not been as great, as economic growth remains strong and US dollar weakness has cushioned the blow of rising fuel costs,” said CAPA.
Cathay Pacific CEO, Tony Tyler, stated that Asia’s airlines still have pricing power in the current market, adding “that’s how we can keep our heads up, despite the very high fuel costs”.
CAPA said fuel surcharges would continue to rise, particularly in less competitive, long-haul international markets.
“Much depends on the Chinese economy, Asia’s dominant market,” said Peter Harbison, CAPA executive chairman. “If it were to stumble, the blowtorch could be quickly applied to Asia’s economies and its airlines.”
Ian Jarrett
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