Rising Fuel Prices

Though analysts are quoting that rising fuel prices would be the chief reason for Grupo’s BAA fling crashing down, the fact is that IATA has forecast air fares will, in reality, drop by 1% per annum over the next decade (IATA estimates). Of course, while rising global fuel prices have made the aviation industry’s operating costs rise up to 22% of total costs (from 13% in 1995), OECD statistics testify that oil prices will stabilise at lower levels over the next decade. Also, and most promisingly, IATA has forecast increased profits, for the industry in Europe (with $1.3 billion projected for 2006).

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Source:- IIPM-Editorial, Editor:- Prof. Arindam Chaudhuri - 2006