Oil on the Airline Industry Research Paper Example | Topics and Well Written Essays - 1000 words

Oil on the Airline Industry - Research Paper practicere high demand and low supply leading to projections of affixd fuel prices in the future, dependency on OPEC countries for fuel leading to change in political equations in the future, need for the respiratory tracts intentness to search for better utilization of its resources to counter increasing crude oil prices and in any case invest in alternative unripened fuel.Fuel costs have become largest single cost component of the global airline industry reaching at 29% of the total operating costs in the year 2007 and 34% in 2008 as comp ard to 13% in 2001 as per IATA calculations (Conrady). This cost further increases to 50% for budget carriers (wikinvest.com). These calculations by IATA be based on crude price of $73/b. With increase in this price, the percentage will increase even further. The future projections of fuel spending and hence the prices are even more disheartening if we weigh at the figures projected by Ener gy Information and Administration (EIA). They have projected the worlds petroleum products consumption to increase from 84mb/d in 2005 to 113mb/d in 2030 with even more consumption in developing economies of Asia and Middle East (Conrady). With the increase in demand for fuel there is a further threat from peaking out of oil reserves in Non-OPEC regions. 70% of the remaining reserves are hence located in OPEC countries. These countries are economically disturbed and also depend on their oil reserves for their economic growth as this sector represents a major part of their earnings. Because of this dependence on oil their predictions regarding their oil reserves is not very reliable as they will always charge out biased information so as not to harm their financial and political prospects (Conrady). It has been estimated that the airline industry contributes around 2% of the greenhouse gases and 11% of the total green house gases emitted by U.S. also (Stuijt).The industry has too mu ch dependence on fossil fuels. This is the greatest threat to this sector. The