It seems that the industry can't catch a break. Finally, there are reports of passenger traffic improving and profits returning to financially battered airlines. Well, good news in the airline industry seems to last about as long as winter daylight in the Arctic. What could it be now?

It doesn't take much for the price of oil to surge. Most of that surge is the result of speculation over the possible outcomes from world events. Though prices are tied to supply and demand, they can also fluctuate because of the "what ifs" of the petroleum industry. Protests in Tunisia, Egypt, Yemen, Bahrain, Libya, and who knows where next have spread across a region that happens to have a great effect on world oil prices. And they are soaring. IATA, the aviation body that represents over 200 airlines around the world, warns that if the price of a barrel of oil reaches US$120 or higher, airlines gains could turn into losses. The price has already surpassed $100 per barrel. This is bad news for an airline industry which only recently started to recover from the last financial crisis.

We remember it too well. The price of oil soared in 2008 and the added fuel costs sent the industry into an unprecedented tailspin. Aircraft were parked, capacity reduced, fuel surcharges skyrocketed and airline passengers were staying home. Once the oil prices fell again, life starting getting back to normal for the airlines and for some, it was getting quite good. There hasn't been enough time for celebrating, however. Just when labor negotiations hint that unions may try to reclaim some of their givebacks over the years because things were getting better for the airlines, another reason for airlines to tighten their purse strings emerges. Just when airlines craft a convenient fee structure to overcome the turbulence of the previous crisis, another bump in the flight occurs. Will the airlines react differently this time?

Most passengers don't believe that all ideas for more fees have been exhausted. Plus, the airlines know that passengers will start staying away if prices spike too much. Parking airplanes and reducing available seats to guarantee fuller flights has definitely helped carriers. Unwilling to easily relinquish recent gains, airlines are boldly raising fares and fuel surcharges in ways they were reluctant to in the past. However, most airlines expected higher fuel prices at some point and some have hedged their future purchases on such prices. This will provide a buffer over severe spikes like we saw in 2008 when the prices soared from a relatively low point to record highs.

No matter what the prices end up being, however, airlines with flights to regions facing civil unrest could we worse off. Some locations facing chaos are popular tourist destinations and airlines may be forced to reduce or suspend service until conditions improve.