'High Oil Prices Here to Stay'

It seems more and more people agree with this view.

EADS chief: high oil prices here to stay

PARIS (AP) -- The head of Airbus' parent EADS said Wednesday that high oil prices are here to stay and the entire industry -- from airlines to air traffic controllers -- will have to adapt.

"We don't see how the price of oil can fall substantially, even if there is a speculative part in the price," CEO Louis Gallois said during a lunch with journalists in Paris.

Airline profits have been pummeled by surging fuel costs combined with a slowing economy, and Gallois didn't rule out the cancellation or delay of deliveries for new aircraft.

"We are very attentive," he said.

Airbus is cushioned by an order backlog that will take around six years to fill, but Gallois' comments highlight the plight of the industry.

"The increase in oil prices is forcing us to reflect on what the air transport of tomorrow will look like," he said.

Finding more efficient methods of fuel consumption is a question for planemakers, airlines, air traffic controllers, airports and government, he said.

Airbus is being asked by airline bosses including Air France-KLM CEO Jean-Cyril Spinetta to consider making more fuel-efficient planes, he said.

Spinetta has asked for an elongated version of the A380 superjumbo, which Gallois said is "possible," and a replacement for the single-aisle A320.

Airbus has no plans to replace what Gallois called its "cash cow" just yet, and is waiting for engine makers such as Rolls Royce and General Electric who in 3 to 4 years could unveil engines that are 25 percent more efficient, he said.

Light, sweet crude for July delivery rose 24 cents to $134.24 a barrel Wednesday on the New York Mercantile Exchange. Prices surged to a record $139.89 per barrel Monday.

While there have been reports that high oil prices are hurting demand in the U.S., by far the world's biggest oil consumer, demand in booming Asian markets and other parts of the world is accelerating rapidly. That growth ensures worldwide supplies remain tight even as U.S. drivers ease up.

Over the weekend, Saudi Arabia told U.N. Secretary-General Ban Ki-moon that it would increase oil output by 200,000 barrels a day, or 2 percent, from June to July. In May, the country raised production by 300,000 barrels a day.