Shares of American Airlines Group Inc fell more than 5% Thursday as sharply higher fuel costs weighed on profits and spooked investors. The carrier reported net profit of $186m, or 39c share, in Q1, down from $340m, or 67c a share, a year ago. Excluding items, American earned 75c a share, 3c above average analyst forecasts. Fuel expenses jumped 25.7% in the quarter. “Higher fuel prices led to a decline in year-over-year earnings, but we are excited about the future,” American Airlines CE Doug Parker said. Rising costs are an ongoing concern for airlines, as high fuel prices and rich bumps in salaries and benefits for pilots, flight attendants and mechanics have swelled operating expenses. This has put a damper on what could have been an otherwise rosy operating environment for American. Robust demand for air travel drove a 5.9% year-over-year increase in quarterly total revenue to a record $10.4b. American said enhancements to its fleet, notably an order of 47 Boeing 787s, will help improve fuel efficiency and lower maintenance costs, saving the carrier money down the line.<br/>
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Rising fuel costs are eating into airline profits, dampening expectations for the rest of 2018, and setting the stage for higher fares. Fuel is the airlines' second-biggest expense after labor, so when it rises — at American it was up 40c a gallon from a year ago — so does the cost of providing air travel, says American Airlines CEO Doug Parker. "If indeed this is where fuel prices are going to stay, I would expect you would see higher fares to consumers over time," Parker said Thursday. American blamed higher fuel prices for a 45% drop in Q1 profit, to $186m. American has replaced many of its gas-guzzling older planes with new, more efficient jets over the last several years. Still, fuel spending jumped 26%. The airline burned just over 1b gallons in Q1, and it paid an average of $2.10 a gallon, up from $1.70 a year earlier. American estimated that it would have saved $412m — more than offsetting the profit slump — if fuel were still at early-2017 levels Fuel prices have crept up even since the first quarter ended March 31. Parker said he doesn't think fares will rise fast enough to have much effect on demand for travel, which has been strong. <br/>
The family of a South Carolina woman who died after suffering a medical emergency midflight is now suing American Airlines alleging wrongful death. Brittany Oswell, 25, suffered an embolism while flying from Honolulu, Hawaii to Dallas, Texas two years ago. The lawsuit claims the flight crew never attempted to make an emergency landing and that the onboard medical equipment was faulty. The lawsuit claims Oswell’s husband, Cory, paged the flight attendants on American Flight 102 about three hours into the trip after she became “dizzy and disoriented” and then fainted. The flight attendants then found a doctor among the other passengers who could further examine Oswell, who at that point was believed to have suffered a panic attack, according to the lawsuit. Several hours later, the flight attendants found Oswell on the floor of one of the plane’s lavatories after her husband flagged them down, according to the lawsuit. The lawsuit alleges that the doctor on the flight told the crew they needed to immediately divert the plane to the nearest airport so that Oswell could receive proper medical care. But with about 90 minutes left until their arrival in Dallas and after a call with a physician who was not on board, the pilots chose not to follow the doctor’s request, according to the lawsuit. American Airlines, in a statement to ABC News about the lawsuit, said: "We take the safety of our passengers very seriously and we are looking into the details of the complaint."<br/>
Increasing competition is making it hard to be Latam Airlines. After a union of cabin crew employees went on strike in Chile April 10, asking for improved working conditions, the carrier said that it couldn’t oblige, citing intensifying rivalry in the domestic market. "Low-cost operators offer fewer benefits than we do, and they pay less than we do," said Ignacio Cueto, Latam’s chairman. "We simply can’t compromise the profitability of the company." The strike underlines a new reality in Chile’s transportation market and legacy carriers may need to adapt, including cutting employee costs, to keep up with low-cost carriers that are quickly sucking up market share. "Low-cost carriers and low prices are here to stay," Cueto said. Cueto was referring to rival Sky Airline, which began operations in 2002 and has been operating as a low-cost carrier since 2013 -- it even hired a former head of operations from RyanAir -- and JetSmart, which started up nine months ago and already claims to control almost 12% of the domestic market. Investors haven’t much been ruffled by the strike. Shares are down less than 1% since it began.<br/>
Russia's S7 Group has been confirmed as the first potential customer for a shrink version of the Sukhoi Superjet 100. S7 Group had been working on technical requirements for the 75-seat aircraft – tentatively named the Superjet 75 or SSJ75. Sukhoi's civil aircraft division says that S7 Group, which includes S7 Airlines, has signed a letter of intent covering the prospective delivery of 50 aircraft with an option on 25 more. The preliminary agreement was reached at the Eurasia air show in Antalya, and will be negotiated further over the summer. Sukhoi states that the deliveries would commence around 2022. "In that case, S7 is to be the launch customer of the new modification," it adds. S7 will participate in a supervisory council which is being created to support development of the new aircraft. "We hope that our collaboration will result in a competitive, efficient aircraft relevant for the market," says Sukhoi Civil Aircraft president Alexander Rubtsov.<br/>