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Business Travel Coalition Study

Fuel costs could bankrupt most airlines next year

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Jun 15, 2008

FORT WORTH, Texas - A new study released by a business travelers group has predicted most major airlines will be bankrupt by next year if fuel costs remain high.

The study, which was commissioned by the Business Travel Coalition, said the commercial aviation industry is "in full-blown crisis and heading toward a catastrophe."

"Over the long term everybody says that these kinds of fuel costs just can't be sustained," said Trebor Banstetter, Fort Worth Star-Telegram aviation writer. "The industry isn't built to operate under these conditions."

Oil priced at $130 a barrel costs the airlines $30 billion a year, a cost they may not be able to recover from passengers.

"You can hit a point where if they raise the prices high enough, people will just stop flying," Banstetter said. "So there is a ceiling there, and the question is, 'When are you going to hit it?'"

For now, passengers seem prepared to deal with the higher prices.

"If people are going to pay $5 a gallon to drive, I'm pretty sure they'll dish out the money to fly," said one traveler at Dallas-Fort Worth International Airport. "I mean, I'm still going to be upset about it, but you can't change it."

While most analysts agree the airline industry is in trouble, not all the forecasts are so bleak. Some analysts are predicting 2009 or 2010 could be turnaround years for the airlines.

Fuel costs could bankrupt most airlines next year

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