International Air Transport Association (IATA) has forecast that the global airline industry could suffer losses of more than $5bn if the oil price climbs to $150 a barrel.
Tony Tyler, director general of IATA, said that high oil prices had replaced the Eurozone crisis as the top risk facing airlines this year. Tyler warned that geopolitical tensions could drive the oil price even higher: "Commentators are pointing to a scenario where the situation with Iran escalates to the point where oil supplies through the strait of Hormuz are affected. Under such a scenario, should oil prices spike to $150 a barrel in the second half of the year … we could see losses in excess of $5bn."
The expected average price of oil this year is $115 a barrel, compared with previous forecasts of $99. Brent crude was $124.16 a barrel at yesterday.
Tyler predicted the industry to grow by just 2% this year due to the fragility of the global economy.
IATA forecasts airline losses due to soaring fuel costs
