Fuel gobbles 73 cents of every airline dollar
Fuel costs eat up as much as 73 cents of every airline dollar, the head of the Air Transport Association said Monday.
ATA CEO James May said fuel costs amount to $139 of the current U.S. average air fare of $191. That leaves airlines $52 to cover the rest of their costs. May made his comments before a U.S. Senate committee, adding the airline industry will lose $10 billion this year and its fuel costs will total $60 billion, up $20 billion from 2007.
ATA represents major U.S. airlines including Tempe, Ariz.-based US Airways Group Inc. (NYSE: LCC).
Airlines and other businesses are pushing Congress, the Bush administration and presidential candidates John McCain and Barack Obama to do something about rising oil prices. They especially want to curtail commodity market speculators and futures traders, who they say are driving up oil prices. That could include imposing new rules on oil and commodities trading to minimize speculation.
Neither McCain — an Arizona Republican– or Obama have talked about such practices in the debate over high oil and gasoline prices. Oil prices stood at more than $133 per barrel Tuesday, according to Oil-Price.net.
Energy inflation is decimating airlines bottom lines and forcing carriers including US Airways, American Airlines and Continental Airlines to cut flights, impose new charges and lay off workers.
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