Airfares out of Australia are predicted to increase dramatically as a result of the surging price of fuel.
The rise in oil prices to $US80 a barrel has left many airline chief executives ‘worried’, according to an international aviation expert.
He also warned the foiled terrorism plot in Sydney last year is a reminder that aviation is a ‘target for terrorists’.
Airfares out of Australia are predicted to increase dramatically as a result of the surging price of fuel
International Air Transport Association chief executive Alexandre de Juniacat made the grim prediction during an address to the Australasian Aviation Press Club Lunch in Sydney.
‘In December last year, we predicted a record industry profit of over $US38 billion for 2018,’ he said. At that time we were expecting an oil price of $US60 per barrel for Brent crude.
‘Now it is approaching $US80. Airlines only make on average $US8 profit per passenger and therefore there is not much room to move,’ he said according to Perth Now.
Mr de Juniacat, a french businessman, also spoke about airline safety, security, and the threat of terrorism.
‘The apprehension of potential bombers in Sydney last year was a grim reminder that aviation remains a target for terrorists,’ he said.
He described security as a ‘Government issue’, and believed airlines should not have to pay for it.
The rise in oil prices to $US 80 a barrel has left many airline chief executives ‘worried’, according to an international aviation expert
He also warned the foiled terrorism plot in Sydney last year is a reminder that aviation is a ‘target for terrorists’
‘We welcome the nearly $300 million that the federal government has allocated to further improving security at Australia’s airports,’ he said.
‘As this is rolled-out, we must carefully ensure that associated costs don’t leak back to airlines,’ he said.
‘Security is, after all, primarily a government responsibility everywhere – public parks local neighbourhoods, train stations and airports.
A Virgin Australia Group spokesperson said like all airlines, Virgin and Tiger are seeing increased fuel costs.
‘Airfares are driven by a number of different factors, including demand, fuel costs, other operating costs, and airport pricing and taxes,’ she said.
‘Like all airlines, we are seeing increased fuel costs and whilst the Virgin Australia Group has a comprehensive hedging program in place which helps to offset this increase, we will continue to monitor the oil price closely and review our pricing structure accordingly.’
Daily Mail Australia has contacted Qantas and Jetstar for comment.
He described security as a ‘government responsibility’ and believes airlines should not have to pay