‘Perfect Storm’ for Airlines Facing Strong U.S. Dollar and High Oil Prices

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Jun 21. Global airlines are grappling with a double whammy from the rare combination of a strong U.S. dollar and high oil prices at a time when broad inflationary pressures and worker shortages are also placing pressure on the pandemic-hit industry’s recovery.

The oil price and the U.S. dollar typically have an inverse relationship so that when one is high, the other is low, helping to even out the financial impact on airlines that operate in other currencies.

That correlation, however, has broken down in recent months with the war in Ukraine causing a spike in oil prices at a time when the United States is a net oil exporter and the U.S. dollar receiving a boost from interest rate rises designed to temper inflation.

Airlines gathering at the International Air Transport Association annual meeting in Doha this week expressed concern about the oil price and U.S. dollar rising in tandem.

Source: Reuters

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130620cookie-check‘Perfect Storm’ for Airlines Facing Strong U.S. Dollar and High Oil Prices