Skift Take
Cheap oil is generally good news for airlines, but a dip to 2003 levels, if sustained, could have serious negative repercussions on plans for new fuel efficient aircraft and industry environmental targets.
Oil just got cheap at $30 a barrel--with some projections that the price of a barrel of could drop even further--which raises questions of what airlines will do with these savings, and what the impact would be on projections for the airline industry.
IATA presented its industry projections to the press this December during a special meeting at the airline organization’s headquarters in Geneva.
At the time, IATA Chief Economist, Brian Pearce, presented forecasts based on a mid-range average of $51/barrel, assuming oil price levels would remain in close to EOY 2015 levels through the first half of 2016.
Pearce did mention forecasts for oil, from $20 barrel to $60 barrel, in December, but stated, “Record inventories suggest a significant rise in 2016 is highly unlikely, but expected stronger economic growth should pull prices up from current levels late
