easyJet boss predicts airline failures on surging fuel costs
24.02.11
easyJet boss Carolyn McCall warned yesterday that accelerating fuel costs could force a number of airline failures this year. Her comments came as oil surged above $110 a barrel for the first time since 2008, with the Libyan crisis showing little sign of abating, the Scotsman reports.
Ms McCall said there could be a further ‘shake out’ in the aviation market if prices continued to soar. Although she stopped short of predicting another ‘bloodbath’ in the industry, she said smaller airlines already struggling with costs could be tipped over the edge.
A number of airlines went under after the last spike in fuel prices in 2008, which coincided with the banking crisis. Among the most high-profile was Edinburgh-based Flyglobespan, while firms such as the business class-only airlines EOS and Silverjet also disappeared along with a number of holiday companies.
Ms McCall said EasyJet has hedged 70 percent of its requirements for 2011, but rising prices could cause problems at the lower end of the industry. She said: ‘It will hurt other airlines, smaller airlines much more than easyJet. It could shake out a bit of the market if oil prices are going to be sustained at this level for some months to come.’
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