Demand destruction. More than grazed shins ahead for some airlines
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As the price of oil prepares to dive below USD100 per barrel, the global economic slowdown threatens to usher in the next – and potentially more damaging - phase of the airline industry crisis: demand destruction. The International Air Transport Association (IATA) stated yesterday that strong traffic growth allowed the industry to partly absorb the rise in fuel costs from 2003-2007, but likely support from future traffic growth is “no longer the case”.
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