Extreme winter weather conditions in the Northern Hemisphere have meant not just operational difficulties for carriers, but added costs as high oil demand has pushed prices firmly back above US$80 per barrel in the first week of trading in 2010 after beginning the climb since mid-Dec-2009, taking jet fuel prices up with it.

Aviation fuel prices are now more than double where they were 12 months ago, and the spike in oil is an ominous sign for the industry struggling to recover from the global economic crisis.

The International Energy Agency (IEA) marginally upgraded its global oil demand estimates for 2010, raising its consumption estimates from 86.2 to 86.3 million barrels per day. In December, the US Energy Information Agency (EIA) forecast revenue from OPEC oil sales would approach US$759 billion in 2010, some 32 per cent higher than in 2008.

IATA’s most recent forecast for 2010 oil prices is US$75 per barrel, which would cost the airline industry approximately US$123 billion.