We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedRisk

BA, Iberia warn rising fuel costs may push up ticket prices


Ongoing violent clashes in Libya spark fears of supply shortages as price of oil tops $112 a barrel

Article comments

British Airways and Iberia’s newly merged company International Airlines Group warned on Friday that the unrest in the Middle East could force up ticket prices on the back of rising fuel costs.

Rising fuel prices pushed up BA ticket prices on long haul flights last month and the airline warned that costs could rise further due to the ongoing violent clashes in places like Libya.

IAG's chief executive Willie Walsh said: "We are monitoring the impact of the current Middle East instability on fuel prices and have the flexibility to change our capacity plans if necessary.”

"We will adjust the surcharge if we believe that is necessary," Walsh told reporters on Friday. "Given the increasing volatility in the fuel price in the last few weeks, if that volatility continues I think it's likely that increases will be seen in the market."

Oil rose more than $1 a barrel to top $112 on Friday as the revolt in Libya sparked fears of supply shortages. Refineries in Europe import about 80 percent of Libya's 1.3 million barrels per day of exports, analysts say.

IAG, which started operations on 24 January and is hedged for 53 percent of its fuel requirements in 2011, said its pro-forma fuel costs rose 5.2 percent or 49 million euros (£42 million) in the final quarter of 2010.

"We are reasonably hedged for the short term (76 percent for the first quarter of 2011) but the price of oil will clearly be a challenge to the market in the short term."

Share:

Recommended Articles

Comments

BA, Iberia warn rising fuel costs may push up ticket prices
Risk

Managing the costs of arbitration when a deal goes wrong

Managing the costs of arbitration when a deal goes wrong

CFOs should be involved in international deal negotiations from the startmore ..


Home Depot confirms breach

Home Depot on Monday confirmed that intruders broke into its payment networks and accessed credit and debit card data of an unspecified number of customers who shopped at its U.S. and Canadian stores.more ..

Home Depot breach could potentially be as big as Target's

In what could turn out to be another huge data breach, Home Depot on Tuesday confirmed that it is investigating a potential compromise of credit card and debit card data belonging to an unspecified number of customers.more ..

EU fines Samsung, Philips and others for smartcard cartel

The companies exchanged sensitive commercial information on pricing, customers and contract negotiations, the Commission saidmore ..

The making of a cybercrime industry

And they're employing tried and tested above-board business methodsmore ..

Is there a bulwark against the rising pound for UK exporters?

Currency volatility has prompted a surge in the use of hedging tacticsmore ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
Can finance rise to the challenge of major transformation?

Can finance rise to the challenge of major transformation?

Outdated finance processes, systems and competencies leave too many questions unanswered more ..

In Depth
Interim CFO or consultant? The pros and cons

Interim CFO or consultant? The pros and cons

Ed Harding offers an insight into the life of an interim CFO and the advantages in driving transformation more ..

Advertisement

* *