Rising fuel costs spell trouble for the US airline industry
After a comfortable 2-year spell of cheap fuel and no major crises to dampen travel demand, US airlines are in for what looks to be a more turbulent 2017. Seven consecutive quarters of declining jet fuel expenses have come to an end as carriers are likely to report higher bills for Q4 2016, with more increases in the offing. Crude oil prices have more than doubled from a Feb 2016 low of US$26 per barrel, with many analysts expecting further, albeit modest increases this year. Atop this cost pressure, 3 of the 4 largest US airlines recently agreed to a bevy of labour contracts, representing roughly $3.3b in higher operating expenses by year’s end, according to Raymond James Financial. Only American Airlines Group has been absent from contract negotiations of late. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2017-01-06/general/rising-fuel-costs-spell-trouble-for-the-us-airline-industry
https://portal.staralliance.com/cms/logo.png
Rising fuel costs spell trouble for the US airline industry
After a comfortable 2-year spell of cheap fuel and no major crises to dampen travel demand, US airlines are in for what looks to be a more turbulent 2017. Seven consecutive quarters of declining jet fuel expenses have come to an end as carriers are likely to report higher bills for Q4 2016, with more increases in the offing. Crude oil prices have more than doubled from a Feb 2016 low of US$26 per barrel, with many analysts expecting further, albeit modest increases this year. Atop this cost pressure, 3 of the 4 largest US airlines recently agreed to a bevy of labour contracts, representing roughly $3.3b in higher operating expenses by year’s end, according to Raymond James Financial. Only American Airlines Group has been absent from contract negotiations of late. <br/>
