The price of NYMEX crude oil futures is just about at the $80 mark, and within the past month, the price of oil has risen nearly $10 (see oil chart below). It’s no surprise that the price of oil is climbing. In early summer, many oil experts predicted the price to settle in the $70s during the Fall season.
How will this affect airlines? Obviously, more expensive oil means higher fuel costs for airlines. Yet, as the IATA predicts, passenger demand will likely rise within the next year, likely allowing airlines’s capacity number to settle. After all, airlines have not cut this many seats since 1942 – an upswing is in the future.
As for predicting future oil prices – I’m certainly not an expert in the field. Yet on forums, I’ve seen predictions around $110 – $120 for 2010. On the bright side, we’re almost out of a recession. All of the indicators look good, except the unemployment rate.
From wtrg.com
