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Johannesburg - The SA aviation industry has breathed a collective sigh of relief as the oil price has started heading down - which could give air travel a boost in 2009.
The airline industry has been under immense pressure over recent months after being tortured by record fuel prices, which have pushed up inflation and caused a global economic slowdown.
"The lower oil prices are expected to reduce inflationary pressures next year which should lead to lower interest rates and improved consumer spending," said CEO of local low-cost airline 1time, Glen Orsmond.
The price of Brent crude oil reached $77 a barrel on Friday. This is almost 48% lower than the $147.27 peak it hit in July, yet still more than double its May 2003 levels.
Higher jet-fuel prices are a direct result of the dramatic spike in the oil price, which is expected to cost the entire aviation industry an additional US$186bn for 2008, according to the International Air Transport Association.
"When oil declined from a peak of $147 to around $83, the rand had only weakened from about R8 to R9 against the dollar in the same period, and the net impact has been significantly lower rand-fuel prices of close to R2 a litre of jet fuel," said Orsmond.
He said that this - coupled with improved consumer spending, lower airfares and economic growth ahead of the 2010 Fifa World Cup - could boost air travel growth in 2009.
- Fin24.com