British Airways' boss Willie Walsh said his airline will survive the current surge in oil prices, but warned other operators will fail and predicted fare rises across the industry.
As oil prices continue to set records, reaching $135 a barrel yesterday, airlines are coming under increasing pressure from soaring costs.
Several airlines, including Oasis and US operator Eos Airlines, have filed for bankruptcy recently, as the oil surge has hit the smaller, budget companies hardest.
UK business carrier Silverjet may be the next victim, as its shares were suspended this morning as the company admitted a loan is urgently needed to continue trading.
Mr Walsh said: "I don't think the industry can absorb these significant increases. Our fuel bill represents 35 per cent – 37 per cent of our cost base.
"In 2000 it was nine per cent. For a low-fare airline it represents about 50 per cent. Some of the low-fare carriers can't make money at $85. For them this is life threatening. Those that are weak are going to go out of business."
The BA chief executive also warned the industry is going to have to raise its prices if it is to survive.
He said this could be through an increase in fares, or through introducing more charges such as a baggage or fuel surcharge.
Asked if this meant the end of "crazy" ticket prices, Mr Walsh said: "My view is yes."
The comments came as American Airlines said it would start charging for checked-in luggage, with prices starting at £7.50 for one bag.
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