Low oil prices can be bad for airlines - analyst
A leading aviation analyst says the impact of low oil prices is bad in one way for airlines. Executive chairman of the CAPA, Peter Harbison, said low fuel prices were dominating the way airlines were thinking and working. They were allowing airlines to keep older, less efficient aircraft in service. Fuel prices have tumbled from more than US$100 a barrel in 2014 to sub-$60 levels for the past 18 months Harbison said that airline operating costs had been reduced on average by 10 to 15%. Airlines needed to constantly reduce costs to maintain profitability but when there was such a visible fall in variable costs this was more difficult. "Suddenly you start making a $1b profit and it's hard to convince people that you need to cut," he said. IATA's latest financial monitor says profitability has peaked. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2016-10-17/general/low-oil-prices-can-be-bad-for-airlines-analyst
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Low oil prices can be bad for airlines - analyst
A leading aviation analyst says the impact of low oil prices is bad in one way for airlines. Executive chairman of the CAPA, Peter Harbison, said low fuel prices were dominating the way airlines were thinking and working. They were allowing airlines to keep older, less efficient aircraft in service. Fuel prices have tumbled from more than US$100 a barrel in 2014 to sub-$60 levels for the past 18 months Harbison said that airline operating costs had been reduced on average by 10 to 15%. Airlines needed to constantly reduce costs to maintain profitability but when there was such a visible fall in variable costs this was more difficult. "Suddenly you start making a $1b profit and it's hard to convince people that you need to cut," he said. IATA's latest financial monitor says profitability has peaked. <br/>
