Air Transport World

Threat of more fuel price hikes mars otherwise "quiet" AGM; several airlines complain of fuel price rises and tell of threats of further hikes before year end. (IATA annual meeting in Hamburg, Germany)

Threat of more fuel price hikes mars otherwise "quiet' AGM

The prospect of a new fuel crisis making a major impact on profits for 1985--already forecast as marginal-- overshadowed deliberations among airline chairmen, presidents and CEOs attending the 41st annual meeting of the International Air Transport Association here.

The fuel story came into the open not on the floor of the conference hall, but at an outside meeting when Colin Marshall, chief executive of British Airways, revealed that his airline, with an annual fuel bill equivalent to $740 million, has had two recent hikes at its main base at Heathrow, London, to add 10^ to the price of a U.S. gallon with the threat of two more similar increases before the end of the year. This, Marshall said, will add up to $70 million to BA's bill, and could result in a fares increase of 4%.

Marshall commented, "We are very alarmed at these increases being imposed on the airline industry as a whole by the oil companies. It is difficult to obtain any rational explanation for them.' He said the rises ranged between 4^ and 8^ a gallon over the rest of the world. BA had been asked to pay another 6^ at JFK Int'l Airport, N.Y., over the previous few weeks.

"Fuel represents for most airlines anything from 20% to 30% of total operating costs, and increases of this magnitude are going to impose a very clear burden on our cost structures. The increases are coming at a time when there does not seem to be any shortage of the product, and it leads one to question what is going on when you have the oil companies with such an apparently coordinated effort slapping on this very substantial price increase. …

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