Oil price concerns airlines

The head of the International Air Transport Association says the continuing high price of oil and the turmoil in credit markets are causes for concern in 2008.

Giovanni Bisignani, IATA’s director-general, said yesterday airlines are expected to post a net profit of US$5.6 billion in 2007.

“It’s one per cent, it’s not much,” he added.
In June, IATA had forecast a profit of $5.1 billion for the year. But he also said the industry’s net profit for 2008 is forecast at $7.8 billion, down from the $9.6 billion projected last June.

Bisignani said one of the big problems facing airlines in the coming year is oil prices and the credit crunch.

“This is the big question mark that we have in front as an industry, as a system,” he said. “If it results in a loss of consumer confidence, this will impact negatively on demand.”

London Free Press