Airlines Tumble as Oil Rises, Carriers Cancel Libya Flights

Airlines Tumble as Oil Rises, Carriers Cancel Libya Flights

European airline stocks tumbled as the price of oil rose to its highest in more than two years and British Airways, KLM and BMI canceled flights to Libya amid intensifying violence.

Willie Walsh, Chief Executive Officer of International Consolidated Airlines Group SA, said rising oil prices would “inevitably” translate into higher fares. British Airways, one of IAG’s two carriers, has raised its fuel surcharge twice since December.

“It’s difficult for the industry to cope with volatility on oil prices,” Walsh said at the ICBI Aircraft Finance and Commercial Aviation conference in Geneva today. “It’s going to impact on ticket prices, no question, if oil prices continue to be at these levels.”

International Consolidated Airlines fell as much as 4 percent in London trading, and was down 1.9 percent at 235 pence as of 2:56 p.m. in London. Deutsche Lufthansa AG was down 2 percent in Frankfurt and Air France-KLM Group traded 3.2 percent lower in Paris.

Lufthansa, Europe’s second-largest carrier, said it’s continuing daily flights from Frankfurt to Tripoli, though it’s prepared to react to developments. The German carrier is using a larger Airbus A340 wide-body jet for flights from the Libyan capital in order to get more passengers out of the country, spokesman Thomas Jachnow said by phone today.

KLM, a unit of Air France-KLM, said it canceled flights to Libya scheduled for tomorrow and Thursday. Air France does not fly to Tripoli.

British Airways and BMI, a unit of Lufthansa, said they will review flight plans for tomorrow.

Delta Air Lines Inc. and AMR Corp.’s American Airlines do not fly to Libya.