Airline group forecasts global losses

The airline industry will lose $2.3 billion this year because of hikes in oil prices, an airline trade group said Monday, revising its earlier forecast of a collective industry profit.

The loss forecast by the International Air Transport Assn., which represents more than 240 airlines around the world, contrasted with a projected profit of $4.5 billion announced in March.

It was the second time the group has lowered its forecast this year.

The forecast uses a consensus oil price of $106.50 a barrel of crude, up from the $86 a barrel used in the March forecast, the group said.

“For every dollar that the price of fuel increases, our costs go up by $1.6 billion,” said Giovanni Bisignani, the association’s chief executive.

The total fuel cost for the airline industry this year is expected to be $176 billion -- 34% of the operating cost, the group said. This is $40-billion more than in 2006.

“The situation has changed dramatically in recent weeks,” Bisignani said. “Oil skyrocketing above $130 per barrel has brought us into uncharted territory.”