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IATA: Air companies may face losses this year

28 February 2011 15:03 (UTC +04:00)

Baku - APA-Economics. Airlines operating flights to the Middle East and North Africa could face losses this year, as tourism slumps and oil prices surge amid political uncertainty and escalating violence, Reuters Africa reported.

Libyan protestors are resisting desperate attempts by Muammar Gaddafi to crush a revolt demanding an end to his 41-year rule. This follows protests in neighbouring Egypt and Tunisia where mass movements toppled entrenched leaders.

"If the unrest continues, it might reach a point where airlines cannot fly into these countries," said Gunther Matschnigg, senior vice president for safety, operations and infrastructure at International Air Transport Association (IATA).

He said Gulf-based carriers and other European airlines operating into the region will be affected in such a scenario.

"Countries like Egypt and Tunisia are popular among tourists and people in these countries also depend on tourism. Unrest in the Middle East will affect the traffic growth," said Matschnigg.

IATA’s Matschnigg said rising oil prices may compel the aviation sector to think about fuel surcharges, thereby increasing ticket costs.

"If prices go higher there will be a discussion about surcharges," said Matschnigg.

"Several airlines have hedged for their fuel needs but not all. It all depends on how long this situation will continue."

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