Airborne oil prices could lead to plummeting airline demand
Thursday, 13 March 2008: It is questionable whether the airline industry can continue to elude the negative consequences that should flow from rising fuel prices.
The focus of the media has been upon banking sector concerns as credit continues to ebb.
However, as inflated oil prices hit an all time high above USD108 yesterday, airline costs are likely to be effected, whilst credit supply impacts demand.
The Centre for Asia Pacific Aviation noted that the airline industry has evaded the complications of rising fuel costs through surcharges and higher load factors, whilst relying upon continued economic stability and consumer demand.
Their prediction is dismal, as they claim the damage to consumer confidence is likely to be reflected in damaged consumer demand.
Growing doubts and diminished confidence in major banks are raising suspicions that the current economic climate has not seen the worst days as yet.
International slowdown led by the US and being followed by the UK continues, with even the new economic giants China and India unable to maintain global economic stability and continue their rosy development.
The struggles reflected in global stock exchanges yesterday stressed the sweeping significance of the credit squeeze.
Consumer spending is not likely to be immediately affected, and indeed, Asian airline demand currently is stable.
Unless there is dramatic turnaround in international financial trends, as oil prices soar, airline demand could nose-dive.