Airlines will lose US$5b this year on fuel costs

SCARBOROUGH, Tobago – The global airline industry will lose about US$5 billion (N$30,5 billion) this year and more bankruptcies of carriers are likely, due in part to rising fuel costs, an International Air Transport Association official said on Monday.

“We expected to have a profit this year but we will have a loss, worldwide speaking … we will have around US$5 billion losses this year instead of US$3 billion profit,” Patricio Sepulveda, IATA vice president for Latin America and the Caribbean, told reporters.”Unfortunately, we will have more (bankruptcies).The picture is not good.Many, many airlines are facing technical bankruptcy but they are still flying,” he said at the opening of the 13th regional conference of the Airports Council International of Latin America and the Caribbean.The global industry group had in recent weeks predicted losses of $3 billion to US$4 billion but had warned that rising fuel prices could push losses higher.The forecast comes despite rising global passenger traffic, which was up 17,7 per cent through the first nine months of 2004 over the same period a year earlier.Sepulveda said fuel accounts for 18 per cent of the operating costs of airlines compared to 16 per cent in 2002.-Nampa-Reuterswe will have around US$5 billion losses this year instead of US$3 billion profit,” Patricio Sepulveda, IATA vice president for Latin America and the Caribbean, told reporters.”Unfortunately, we will have more (bankruptcies).The picture is not good.Many, many airlines are facing technical bankruptcy but they are still flying,” he said at the opening of the 13th regional conference of the Airports Council International of Latin America and the Caribbean.The global industry group had in recent weeks predicted losses of $3 billion to US$4 billion but had warned that rising fuel prices could push losses higher.The forecast comes despite rising global passenger traffic, which was up 17,7 per cent through the first nine months of 2004 over the same period a year earlier.Sepulveda said fuel accounts for 18 per cent of the operating costs of airlines compared to 16 per cent in 2002.-Nampa-Reuters