Rising oil costs are likely to mean losses of $7.4 billion in 2005 for the world's airlines, according to the International Air Transport Association today.
The new forecast by IATA comes on the heels of a jump in the projected price of oil for 2005 to an average of $57 a barrel. In May, IATA issued a loss forecast of $6 billion based on an average price of oil at $47 a barrel.
'Oil is once again robbing the industry of a return to profitability. Each dollar added to the price of a barrel of oil adds $1 billion in costs to the industry,' said Giovanni Bisignani, IATA's director general and chief executive.
The association of 265 airlines said US carriers are bearing the brunt of the losses. European airlines are expected to break even and Asia Pacific carriers will make a profit in the range of $1 billion, but losses by North American carriers could exceed $8 billion.
Cumulatively, airline industry losses for 2001-2004 were $36 billion, of which $32 billion was lost in North America. US airlines also suffered badly after the September 11, 2001 attacks.
IATA said the industry fuel bill rose from $44 billion in 2003 - with Brent crude oil at an average price of $29 a barrel - to $63 billion in 2004. At $57 a barrel, the total airline industry fuel cost for 2005 will top $97 billion.
