I read that Air India, the national airline of India, has made losses for several years running, to the order of 6400 Crore Rupees annually and 5760 Crore Rupees annually and so on.
One Crore Rupees is equivalent to £125,000 or US$198,000 approximately. So when the sums are translated, it is clear what sort of crisis has occured, mainly attributable to the high Oil price.
In Europe and U.S., airlines have either merged, gone under or filed for Chapter 11. Those too have suffered mainly due to the high Oil price.
The Indian Industrial Output figure has been downwards recently, and with the external debt figures and the continuing high Oil price, a solution is not too obvious to stave off sliding into recession. India normally has short recessions, lasting about four months or so, due to the robust nature of economic activity and the absence of a social security state. But those four months impact the trading partners of India, and the slowdown magnifies worldwide.
As I have mentioned in a previous article on Parameters of Recovery, oil price needs to be not above $85 a barrel for WTI or Nymex for a sustained period of at least six months for Recovery to continue. We are at the turning point on the path to complete Recovery, and it will auger well for the OPEC countries and the traders and margin-setters to continue to reduce the Oil price, so that a double-dip can be avoided, by grace of God.
The high Oil price is causing poverty in many countries, example Yemen, where inflation has caused rising food prices and people unable to feed their children.
As the Saudi Oil Minister, Sheikh Ali Al-Naimi remarked few months ago "there is no rational reason for the Oil price to be so high".
I sincerely hope people are listening and taking the necessary steps.
(P.S. A double dip could be defined as a recession followed by a short Recovery followed by another recession. We are just at the margins of it, and hopefully can navigate out of it, by grace of God.)