Fuel constitutes 30-40% of the trips cost
Iraqi crisis may raise the prices of airline tickets 4% globally
The fighting spilled over and the violence in Iraq. But it did not extend to terrorist operations, but in the form of economic losses to domestic airlines. The airlines such as easy Jet ' and ' any AG ' and ' TUI ' have suffered from a decline in the stock prices of publicly traded British by Iraq events. First the losses resulted from higher prices of Brent crude sharply with the outbreak of fighting two weeks ago. And with the continuing violence took oil prices and jet fuel to rise to about 115 dollars a barrel.
He said for the ' economic ' Simon Knight, Deputy Executive Director of the company ' easyJet ' said: ' traditionally the second quarter is often bad for airline performance, the school year continues in schools and universities, the demand for international flights is usually low, and corporate public budget builds on this Foundation, then working to reduce costs during that period, but with the sudden rise in oil prices, as a result of the internal situation in Iraq, the cost of flights while demand remained low, reflecting all this relatively low profit margins due to intense competition and reductions offered by such carriers '. And he adds: ' our expectations is based on the increase in oil prices by 4 per cent, bearing in mind that fuel is between 4.3 per cent of the cost of flights, we can easily measure the size of the losses we have. '
The domestic airlines in Britain have consumed over the past year, about 5.5 million tons of aviation fuel ' ATF ', and during the first half of the year increased spending on fuel bills to British airlines to 2.6 per cent. Expected number of workers in the tourism industry to see fares rise this summer. And for the ' economic ' Powell commented Sylvain tourism expert, said: ' the whole thing will depend on continuing the ongoing hostilities in Iraq, the extent to which it will expand its scope and impact on the world markets and oil prices, if the crisis continued, as expected, the airline will have a way to deal with the rise in fuel prices by raising the prices of air tickets. And about the expected increase, Powell Sylvain believed would be between 4.3 per cent and will be seen during the next three weeks.
While British airlines expects a further rise in oil prices due to fighting in Iraq, another threat looming on the horizon remains the improvement in industrial performance in China, the translation process is increasing Chinese demand for oil to run more productive units, the report issued by the Bank ' HSBC ' expansion in China's industrial production for the first time this year. And Khalil Hassan Arab oil expert, said: ' most of the projections indicate that the coming months will see a rise in oil prices in the world market, Iraq currently produces about 3 million barrels a day, and so far we cannot say that there is a real decline in the world's oil supply, Saudi Arabia could easily make up the shortfall caused by disorders of Iraq, but continues to add to the depth of the crisis and the deterioration of the situation in Libya, and increased Chinese demand by another may lead to high In the price of oil and its derivatives.
He adds: ' it is not expected that an increase of 6.5 per cent. However, some believe British airlines overstate the impact of the Iraqi situation to find a justification for raising the prices of airline tickets over the coming weeks, rising oil prices also coincided with the rising price of Sterling against other international currencies, which makes British companies in a better relative position compared to European or American counterparts when purchasing fuel requirements. Despite the adoption of the economists that there is a rise in the price of oil and its derivatives, including jet fuel, the airline's permanent desire to transform any increase in fuel prices to the consumer through higher prices clearly shows an unwillingness to retreat from their current profitability.