More European airlines will go bust this year as their collective losses top $1bn (£642m), according to the industry’s global body.
The International Air Transport Association’s bleak forecast, doubling the losses predicted in March, warned that an intensified eurozone crisis and a return to higher fuel costs were real risks that could sink the industry further.
Tony Tyler, the chief executive of Iata, said the state of the industry was “‘fragile'” and that “‘profitability is balancing on a knife-edge'”.
Despite the price of oil dipping below $100 a barrel last week, fuel remained around 33% of airlines’ operating costs, compared with just 13% 10 years ago. “‘It’s our biggest challenge, and one with little predictability.'” Any deteriorating relations with Iran could have a severe impact on aviation, he said.