Airlines Sink in Losses as Oil Prices Raise

Patricio Sepulveda, vice president of the International Air Transportation Agency (IATA) for Latin America and the Caribbean, warned airlines will lose as many as $5 billion this year as a result of spiking oil prices.

"Even though it´s $5 billion in losses worldwide we´re talking about, we´re confident there´ll be $3 billion worth of profits by the end of the year," Mr. Sepulveda was quoted as saying during the 13th Assembly of Airport Councils (AC) that took place in Trinidad & Tobago.

For his part, AC Chairman Ernesto Gutierrez explained that despite recent transformations ordered in air terminals in the wake of the 9/11 terrorist attacks in the U.S., traffic of airborne passengers in the region soared five percent more than in the past fifteen years.

"Reports from the past five years really bear watching in view of the current upbeat trends in the world aviation market," Mr. Gutierrez pointed out.

The 9/11 terrorist attacks in the U.S., the wars in Afghanistan and Iraq, the SARS outbreak in Asia and a number of other factors have hurt both tourism and the aviation industry. Many of these predicaments have forced airports to heighten security and take belt-tightening actions that have eventually taken a dramatic toll on funds, personnel and budgets.

"I believe the most important thing of all is to vindicate airports´ rights to get subsidies, loans at low interest rates and other types of financial support from their governments to prevent air infrastructure from being affected by this kind of contingency," Mr. Gutierrez suggested.

The AC chairman insisted on the need to streamline air terminals in Latin America and the Caribbean for them to be at the top of the market, and announced plans to build new airports for $14 billion over the next two decades.

The International Air Transportation Agency gathers the world´s 275 biggest air companies.