The airlines They will pass on rising crude oil prices to passengers through higher fares relatively quickly, but rising energy costs will worsen the overall outlook for the sector in 2022, according to the director of the International Air Transport Association (IATA).
After JetBlue launched a counter bid for US low-cost carrier Spirit Airlines, IATA Director General Willie Walsh also said he sees more room for consolidation among US carriers.
“The market has been surprised. It is proof that the financial strength of US airlines stands apart from the rest of the world.Walsh said at a briefing, adding that consumers had benefited from large investments in new products.
Passenger traffic picks up
IATA said global passenger traffic rebounded in February as the impact of the omicron variant of the coronavirus receded outside of Asia. The war in Ukraine has not yet moved into the monthly data.
In February, passenger traffic stood at 54.5% of the levels seen in the same month of 2019, up from 50.6% in January, but down from 55.1% in December. Load volume stood at 111.9%.
Airlines are grappling with a surge in crude oil prices, which has accelerated following Russia’s invasion of Ukraine, a move Vladimir Putin’s government describes as aspecial military operation”.
The rise has worsened a picture that was already expected to include an industry-wide loss in 2022, though some airlines will make a profit as the world stages an uneven recovery, Walsh said.
With information from Reuters
