Airlines fear profits will dip due to soaring oil prices

Mumbai: Threatening the growth momentum in the economy, the surging crude oil prices have started giving sleepless nights to the country's aviation barons whose profitability has come under a cloud.
As civil unrest engulfs the Middle East, especially Libya, prices of Brent crude oil on Thursday touched a 30-month high of $120 a barrel, up seven per cent in a day causing concern in the whole world and panic selling across major stock markets.
According to some analysts in the US, Brent crude prices could near $158 a barrel by the year end. In mid-2008, Brent crude priced had crossed $147 a barrel forcing airlines to park some of their planes to cut down on their fuel bills.
In early January when crude prices were hovering at around $90 a barrel, some airlines had increased their fuel surcharge to offset the extra outgo.
However, this time their hands are tied due to the upcoming lean season.
25/02/11 Business Today

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Categories: Indian Aviation- In General Feb 2011