‘Oil is the emerging worry for 2011’, says IATA

‘Oil is the emerging worry for 2011’, says IATA

The International Air Transport Association (IATA) has indicated that airlines could face a challenging year if oil prices continue to rise. The comment overshadows the association’s latest traffic figures, which show that passenger numbers are up 8.2 percent for last month compared to January 2010. “We are all watching closely as events unfold in the Middle East. The region’s instability has sent oil prices skyrocketing,” said Giovanni Bisignani, director general and CEO of IATA. “For each dollar it increases, the industry is challenged to recover $1.6 billion in additional costs. With $598 billion in revenues, $9.1 billion in profits and a profit margin of just 1.5 percent, even with good news on traffic 2011 is starting out as a very challenging year for airlines.” Bisignani also warned that governments in Iceland and South Africa are planning to increase or add air travel taxes. “Governments need to improve their finances and restart their economies. Mobility is a catalyst for economic growth,” explained Bisignani. “Governments must understand that taxing air transport out of the range of price sensitive travelers and businesses makes very little economic sense.”

Gary Marshall
Written by:
Gary Marshall
Posted On:
Posted In: