Airlines fight uphill to stay alive

With fuel costs skyrocketing, airline industry experts are predicting losses as high as US 6.1 billion dollars if crude oil stays at the current prices. This updated estimate compared with previous forecasts, shows that the industry could go from a potential profit of 4.5 billion to a 6.8 billion loss. Keeping inline with the weakening market, in the last 6 months, 24 airlines have failed due to high fuel costs and are causing a complete reshaping of the air transport industry. If rising oil costs are not enough, the industry is also beginning to feel the impacts of the US consumer credit troubles which have found consumers flying and spending less.

Estimates by IATA have shown that fuel impacts the industry by $1.6 billion dollars for every one dollar that fuel increases. With a oil skyrocketing to over $130 a barrel, everyone is watching the industry to see how far their troubles could go noting that fuel is now currently taking up about 34% of all operating costs.  Only 5 years ago, fuel was accounting for 13% of all operating expenses.

The International Air Transport Association is calling on all organizations involved with controlling the industry such as governments, unions and industry partners, to help respond to the fuel crisis and other issues causing a steep down turn for the industry. IATA is hoping to see changes to the industry to help it rebound from its current condition. Some of these changes more regulations to help break up monopolies and increased sharing of information among international security.