Globally, during the first half of the year, the aviation industry was adversely impacted by high crude oil prices which peaked at an all time high of USD 147 per barrel in July 2008. Although the crude oil prices reduced sharply in the second half of the year, most airlines did not realise the full benefits of the reduction due to forward fuel hedge contracts that resulted in losses. In view of the above, the majority of airlines are posting losses in this financial year whilst pushing others into filing for bankruptcy. IATA, the global industry body, estimates that airlines made a combined loss of KShs
680bn in 2008 and will make further losses of KShs 376bn in 2009.