Fill 'er up? That'll be $68,948 please

It’s hard to muster any sort of sympathy for the airlines what with the ever-more frequent delays, lost luggage and constant nickel-and-dime fee increases for service that used to be free.  But $68,948 to fill up a Boeing 777 for a flight from Toronto to London? That has to hurt.

Indeed it does says Air Canada. With oil prices in record territory, Air Canada reports it's still losing money on fares despite $145 fuel surcharges, the GlobeandMail.com reported today. That means the $145 fuel surcharge on the Toronto-London route doesn't cover the one-way fueling costs of $197.56 for each of the 349 seats.   

Air Canada also uses Boeing 767s on the transatlantic service, with the fill-up costing $47,658, or $225.87 for each of the aircraft's 211 seats.

Analysts told the newspaper every annual increase of $1 a barrel lops $25 million from the airline's operating profit.

And things just get worse. The International Air Transport Association's (IATA) this week said 24 airlines have suspended operations or gone out of business in the past six months, as prices for crude soared 40%.  In 2002, nearly $40-billion in fuel bills accounted for 13% of the global airline sector's operating costs.

This year, expenses for jet fuel will likely surpass $176-billion and gobble up 34% of operating costs, the IATA said.The IATA, which represents 240 of the world's largest airlines, predicts a minimum industry-wide loss of $2.3 billion, based on an oil price of $106.50 a barrel for the rest of the year. That is a $6.8 billion plunge from March, when IATA forecast an industry profit of $4.5 billion for 2008. 

Of course, with oil hitting over $130 a barrel recently, even those number seem low.  The situation is grim, the IATA said.

Meanwhile, major airline bosses today slammed European governments for their failure to integrate air traffic control networks as a means of cutting aircraft fuel consumption. British Airways Chief Executive Willie Walsh berated the lack of progress in establishing a so-called Single European Sky over the past few decades. "Governments have got to be embarrassed into addressing the issue. This is a scandal and it's got to be tackled," he said.

It's estimated that aircraft could burn 10-15% less fuel and save a total of $ 2 billion a year by flying on optimal more direct flights paths controlled by a single European aircraft traffic control body. Currently there are over 30 different air traffic control networks across Europe but governments have been reluctant to merge them to protect national interests and safeguard jobs.

Layer 8 in a box 

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