As U.S. crude oil prices crossed $100 a barrel for the first time since September 2012 on Wednesday, the CEO of International Air Transport Association (IATA) warned that any further spike in oil prices could lead to higher passenger fares.
"Any pressure upwards is a great concern for the industry. A third of our costs are oil costs so clearly any movement upwards is going to have an impact," Tony Tyler of IATA told CNBC.
(Read More: US Oil Jumps Above $100 a Barrel)
"These charges have to be passed on. For competitive reasons the airlines will be reluctant to be the first to do so. But as time goes on we will see upwards pressure on fares, if fuel prices remain high," he added.
Crude futures rose as high as $100.64 in early Asian trade, having tested the $100 mark in the New York session, driven by supply concerns stemming from geopolitical turmoil including political unrest in Egypt and protests in Libya that have shut down several oil fields in the country.
For Asian carriers, the rise in U.S. dollar denominated oil prices coupled with depreciating Asian currencies will pose a greater challenge, Tyler noted.
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"It's a double whamming if dollar denominated oil price goes up, and your own yields fall because of weaker currency. It makes life extremely difficult for them," he said.