$100 oil would threaten airlines: IATA economist

Oil prices of 100 dollars a barrel or more are a possibility that would seriously threaten airlines, IATA chief economist Brian Pearce told AFP. "It is fear that takes fuel prices up. If there is a disaster in the Middle East and a real shortage of oil, then it is possible."

"A 70-dollar barrel has been sustainable so far because airlines cut costs and have considerably gained in efficiency," he said, adding that an increase of 30 dollars more would be tough for the industry to handle. "There is a danger if we saw another big hike of fuel prices, it could cause an economic slowdown and deprive airlines of strong traffic revenues" which help to offset higher fuel costs. "It will therefore represent a real danger for the aviation industry."

The IATA groups 265 airlines which represent 94 percent of international air traffic. It has calculated that the fuel bill for the air transport sector will amount to 112 billion dollars this year, or triple the figure in 2002. Fuel accounts for 26% of operating costs, the IATA says.

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