High oil prices spur Sarkozy energy summit

29th October 2004, Comments 0 comments

PARIS, Oct 28 (AFP) - Representatives of the French government, oil sector and automobile companies are to meet Friday to discuss joint strategies to cope with sky-high oil prices that are threatening European economic growth.

PARIS, Oct 28 (AFP) - Representatives of the French government, oil sector and automobile companies are to meet Friday to discuss joint strategies to cope with sky-high oil prices that are threatening European economic growth.

The meeting, to be chaired by Economy and Finance Minister Nicolas Sarkozy, will assess the impact oil prices of over USD 50 a barrel are having on industry and come up with a campaign urging the French to limit oil consumption, Sarkozy's office said in a statement.

Friday, oil prices in New York continued to ease to just over USD 51, but businesses in several countries remain concerned about the effect the historically high cost is having on manufacturing, energy and transport sectors.

A former general director of the International Air Transport Association, Pierre Jeanniot, told an international airlines conference in Cannes on the French Riviera that despite a growth in passenger numbers this year, "the cost of fuel will once again unfortunately kill any hope of a return to profits."

According to IATA, the number of passengers over the past nine months grew nearly 18 percent compared with the same period last year, but cumulated annual losses for the airline sector could reach as high as USD 6 billion.

Previous forecasts had predicted an overall profit of USD 3 billion dollars this year, but that has been largely reversed by the oil prices.

IATA president and Air France chief Jean-Cyril Spinetta told the conference that fuel was the biggest overhead for his airline, representing 15 percent of costs.

"Soon, it'll be 20 percent," he said.

Many major airlines have sought to offset the cost by adding a fuel surcharge to passenger tickets, particularly on long-haul routes which are not subject to the fierce competition of short-range budget carriers.

A few of the airlines, notably British Airways and Lufthansa, have managed to record profits, and Air France said it will also likely stay in the black, but many others - mainly in North America - are staring at pools of red ink.

© AFP

Subject: French News

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