Novus Aviation Capital managing director Mounir Kuzbari said that oil prices of $60-$80 are "positive" for the region's aviation market
Airlines around the world have become “more agile and sophisticated” when it comes to managing oil prices, according to Mounir Kuzbari, the managing director of Dubai-based aircraft lessor Novus Aviation Capital.
In an interview with Arabian Business, Kuzbari said that 30 to 40 percent of operating costs for airlines is spent on fuel, depending on their location.
“Clearly, that will have an impact,” he said. “But if we’re looking at $60 to $80 a barrel, airlines have generally been able to manage and plan for that.”
“Remember, airlines were running at $140 a barrel some time ago,” Kuzbari added. “They’re becoming more agile and more sophisticated in terms of managing high oil prices.
In July 2008, oil prices rose to a high of $147. As of Sunday, crude oil stands at $53.36.
Additionally, Kuzbari said he believes that having oil priced between $60 and $80 would be “positive” for the Middle East, as it would help balance budgets and create more liquidity in the system and GDP growth.”
“That should help traffic,” he said. “Outside the region, some airlines are going to suffer more, especially the ones in emerging markets that are weaker. Those will suffer if oil stays where it is.”
However, Kuzbari said that prices above $100 – perhaps caused by geopolitical events – would “be problematic for the entire system.”
In late April, Emirates airline chairman Sheikh Ahmed bin Saeed Al Maktoum said that the carrier continues to be affected by high oil prices.
“It’s not only for Emirates, but for everybody. It all depends on when you do your pricing, when you sell, when you re-fill your aircraft, and when a passenger is flying,” he said. “I always want to see the prices of oil below $60, but that is not my call and my decision. There’s always a lot of elements.”For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.