IATA warns: Don’t bite the hand that feeds you
ISTANBUL – The bad news just keeps coming for the world’s airlines as the cost of fuel surges and the red ink starts to drip all over balance sheets.
IATA forecasts a loss of US$2.3 billion for 2008 based on an average oil price of US$106.5 per barrel, but things could get a lot worse.
Losses could reach US$6.1 billion with an oil price at US$135 per barrel for rest of the year, IATA warned.


Director general and CEO, Giovanni Bisignani, compared the airline industry to Sisyphus – a mythical character whose fate was to constantly carry heavy loads uphill.


Over the last 60 years the industry made US$11.5 trillion in revenues, but only US$32 billion in profits. Average margin for the entire industry has been just 0.3%. And the industry is US$190 billion in debt.
“Since 2001, airlines achieved massive change. Fuel efficiency improved 19% and non-fuel unit costs dropped 18%. The skyrocketing price of oil has eaten these gains and left the industry in the red again.
“Oil prices at US$130 a barrel are changing the game for everyone. The situation is grim,†said Bisignani.


Bisignani said governments must stop “crazy taxation, change the rules of the game and fix the infrastructureâ€.
“We are in this together. Don’t bite the hand that feeds you,” said Bisignani.
Ian Jarrett
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