Higher wages, fuel prices turn up cost pressure on airlines

With inflation paramount in investors' minds at a time of rising wages and oil prices, the line separating winners and losers in the global airline industry this year looks likely to be drawn on how well they manage costs, especially on the labour side. IATA in December flagged higher spending on labour and fuel - which make up about half of airlines' operating expenses - as their members' biggest challenge in 2018, especially after several years of record profits. Labour costs surpassed fuel as global airlines' biggest single expense in 2016, at 22% of costs against just under 21% for fuel. That is expected to jump this year to 30.9% versus 20.5% for fuel. Back in 2013, when oil prices were much higher than now, fuel was 33% of expenses against 18% for labour. <br/>