SOARING jet fuel prices have become the “fifth horseman of the apocalypse” and will cost the global airline industry more than $6 billion (£3.3 billion) in losses by the end of this year, the head of the leading airline industry body said yesterday.

The forecast is more than $500 million greater than previous predictions. The cost of fuel will make this year the fourth consecutive year in which the airline industry has suffered big losses, and comes as many carriers are only just emerging from the damage caused by terrorism and Sars.

Giovanni Bisignani, director-general of the International Air Transport Association (Iata), who opened its two-day annual conference in Tokyo yesterday, said the industry was in crisis and faced a jet fuel bill of $83 billion — equal to the GDP of New Zealand — this year. Addressing an audience representing 95 per cent of the industry, Signor Bisignani said Iata members had been too soft on suppliers and labour.

Jean-Cyril Spinetta, the chairman and chief executive of Air France, said that high energy costs would accelerate consolidation in the industry.

Signor Bisignani attacked President Chirac of France and Chancellor Schröder of Germany, saying that their proposal to tax airline fuel and tickets to fund the fight against health epidemics in the Third World was a “political gimmick”.

“Governments must stop treating us like cash cows,” he said. “Development is a serious issue that needs a serious solution. But taxing airline travellers is about the dumbest way possible to achieve it.”

Signor Bisignani said that the EU could do more by lowering farm subsidies and placing a higher tax on Europe’s $50 billion-a-year arms industry.

Iata also believes that the airline industry is being dragged down by the struggling North American market, where companies suffered combined losses of more than $9 billion last year. The association said that the US tax position, in which levies on a $200 ticket average 26 per cent, was a “$15 billion rip-off”.

However, Iata reserved its fiercest attack for regulation, saying that the “flags on our aircraft are so heavy they are sinking the industry”.

The association accused countries of distorting competition by giving preferential treatment to low-cost carriers and of micro-managing the industry through penalties for cancellations and delays. Signor Bisignani said: “In response to 700 complaints, we got $750 million of bad consumer regulation. This is part of the last European Commission’s $7.6 billion legacy of mis-regulation.”

The conference has so far produced only a small number of optimistic comments. Analysts pointed out that airlines in Asia made profits of about $2.6 billion last year, driven by growth in China.

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