The crisis in Libya is having a savage impact on its citizens and those expat workers trying desperately to get out of the country. We have caught momentary glimpses in the media recently of the fight for survival in the oil-rich state just across the Mediterranean Sea from Europe. But the impact of the Libyan revolution on our everyday lives is beginning to be felt in other ways too.

Libya is strategically important to western interests due to its huge oil deposits. The country may only produce 2% of total world oil output, but it is significant for several key reasons:

• Libya’s oil is high quality, needing relatively little refining to prepare it for use by industry and consumers.
• Its location makes it ideal to serve developed markets in Europe.
• There is less strategic risk in transporting Libya’s oil to our markets, as it can come straight to Europe.

According to IATA’s Jet Fuel Price Monitor, the price of jet fuel has risen by almost 40% in the past year. This will have an inevitable impact on the costs borne by airlines. As a consequence, air travellers will face higher prices too.

International Airlines Group, which comprises BA and Iberia, today announced its financial results for the three months to the end of December 2010. The group posted profits of 21m Euro for this period compared to a loss of 208m Euro in the same period a year ago. But the results revealed the group’s rising fuel costs and chief executive, Willie Walsh, indicated that these are likely to rise from 3.9bn to 5.1bn Euros in 2011.

Air travellers are likely to see the effects of these cost rises in the coming months. A live example of how events occurring in one part of the world can have direct impacts on entire business sectors.