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Regional aviation costs rising

Thursday, 4th August, 2011

Rising fuel costs is affecting all aspects of life, sending prices soaring. Regional aviation operations and other major airline carriers have not been spared.

A joint half-year report by the works ministry and British Airways points to the political uprising in some North African and Arab states as having seriously impacted on the aviation industry in the first half of 2011.

Willie Walsh, the International Airlines Group chief executive, said the cost of fuel is “still a significant issue.” International Airlines Group is the holding company of British Airways and Iberia that merged in January 2011.

In Uganda, the aviation sector is also held back by the lack of a strong home-based airline that would facilitate the regional development of Entebbe International Airport into a hub.

The other hindrance to the Ugandan aviation sector is the high cost of aviation fuel as compared to airports in neighbouring countries, which pushes air transport costs up.

For British Airways, uprisings in some oil-producing nations in the Middle East has seen supply of oil go down, putting further pressure on prices.

The strategy, according to British Airways officials, has called for expansion in previously less explored markets mainly between Europe and Africa.

The uprisings in the Middle East and North Africa are expected to cost major carriers up to 100m euros in operating profit, according to experts.

IAG made 39b euros in profits before tax from the 419b euros loss recorded for the same period last year.

Revenue increased by close to 18%, moving up to 7.7b euros.

By David Mugabe : The New Vision Newspaper

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