Iata warns that this situation, added to the cancellation of flights due to the Russia-Ukraine crisis, would generate losses of more than US$11.6 billion.

The prices of oil in its Brent reference (which serves Colombia), and in the WTI, have the market and the companies doing the math. Yesterday, the first reference in question closed at US$109.19 a barrel, while for the second it ended at US$106.02. For the accounts of producing countries such as Colombia, this is favorable, but companies such as those in the airline sector are forced to tighten their belts.

This is the case of Latam Airlines, one of the most important players in that industry in Latin America. “Regarding the impact of fuel, we consume approximately 2.8 million barrels per month, 2.5 million barrels per month, but effectively when you have these increases in fuel prices, you have to adjust capacity (. ..)”, said Ramiro Alfonsín, CFO of the company, to the Chilean media outlet La Tercera.

All this, he added, will lead to a reduction in the number of barrels and with this, it is being evaluated to reduce the frequency of some flights or the partial suspension of certain destinations.

The uncertainty is not only for Latam Airlines, but for the entire industry. In fact, the International Air Transport Association (Iata) assured yesterday that flight cancellations caused by the Ukraine-Russia crisis, coupled with the sudden increase in fuel prices, are putting pressure on airline costs.

“As of March 4, jet fuel is trading at more than $140 a barrel. Absorbing such a massive hit in costs just as the industry is struggling to cut losses as it emerges from the two-year Covid-19 crisis is a huge challenge. If the price of jet fuel remains this high, over time it is reasonable to expect that it will be reflected in the performance of airlines, ”Willie Walsh, director general of IATA, said in an official document.

The director even left in the inkwell the hard economic blow that would be for the airlines, because in the accounts of the organization he leads it was thought that this year these companies would close with a deficit of US$11.6 billion with fuel at US$78 per barrel; but with the current price well above it, the losses would be greater.

“A permanent and disproportionate increase in fuel prices affects the competitive rates that airlines have been implementing to reactivate tourism and business travel. To this is added that the dollar is high, and in that currency the fuel is paid. That would have implications for the final price of air tickets”, analyzed Claudia Velasquez, tourism and aeronautics consultant.