Airlines have already done away with little luxuries such as meals in an attempt to trim costs but there is one thing they cannot do without: fuel.

The recent surge in the oil price has caught most airlines on the hop and they have not fully hedged their fuel requirements for next year. That will almost certainly mean higher fares for passengers, unless the turmoil in the financial marketscauses a widespread economic slowdown.

In such an environment, companies may be less willing to pay thousands of pounds for executives to fly business class and tourists will start hoping that global warming makes holidaying at home tolerable.

If demand does slow, it will be difficult for airlines to pass on higher fuel costs to passengers and balance sheets will take the hit instead. This could at last reveal the true state of the aviation sector.

Even the poorest airlines have been sheltered in recent years by booming demand for air travel, but a combination of high fuel costs and falling demand will expose the weak. Willie Walsh, the BA chief executive, hinted at this yesterday when he warned that high fuel prices could force weaker airlines to cut flights.

The airlines most at threat are the legacy carriers of Europe and North America. Alitalia is already downsizing and a largely unhedged fuel bill could be the final nail in its coffin. But every time these ageing airlines appear to be on the verge of expiring, their governments step in. The United States’s supposedly market-driven economy does not extend to airlines and European nations will go to extraordinary lengths to keep aircraft in the sky just because they carry the national flag.

This is bad for passengers, who have to fly on old aircraft and suffer poor service. It is also bad for safety and the environment as old aircraft emit more carbon dioxide.

High oil prices should be allowed to punish the inefficient as it will create a stronger aviation sector in the future.

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