Airlines begin to cut flying as they grapple with fuel-cost jump
US airlines have begun paring flight plans due to soaring fuel prices, underscoring the speed at which Russia’s attack on Ukraine has upended the industry and jeopardized a hoped-for rebound this year. Alaska Air Group Inc. will trim flying by as much as 5% in the first half in response to “the sharp rise in fuel costs,” according to a regulatory filing Tuesday. Allegiant Airlines plans to reduce Q2 capacity between 5% and 10%, CFO Greg Anderson said at a Raymond James Financial Inc. conference Monday. The carrier will trim flight frequency mainly in weaker demand times. The comments, relayed in a note by Raymond James analyst Savanthi Syth, were confirmed by an Allegiant spokeswoman. The industry concern is that exorbitant gasoline prices could sap consumers’ spending power and lead to slower demand for vacations and other leisure pursuits. Higher prices also raise costs for airlines, making it difficult to maintain profits if they can’t pass the expenses along to customers. Spot jet fuel prices for delivery in New York harbor have jumped 73% this year to $3.98 a gallon, the highest since 2008. In January US airlines were predicting they’d pay around $2.50 a gallon. Seattle-based Alaska sees continued strong demand for spring break and summer travel, but it cited fuel prices as a significant uncertainty. “The impact on the economy is the question we all have now,” CFO Shane Tackett said at a Raymond James conference.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2022-03-09/general/airlines-begin-to-cut-flying-as-they-grapple-with-fuel-cost-jump
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Airlines begin to cut flying as they grapple with fuel-cost jump
US airlines have begun paring flight plans due to soaring fuel prices, underscoring the speed at which Russia’s attack on Ukraine has upended the industry and jeopardized a hoped-for rebound this year. Alaska Air Group Inc. will trim flying by as much as 5% in the first half in response to “the sharp rise in fuel costs,” according to a regulatory filing Tuesday. Allegiant Airlines plans to reduce Q2 capacity between 5% and 10%, CFO Greg Anderson said at a Raymond James Financial Inc. conference Monday. The carrier will trim flight frequency mainly in weaker demand times. The comments, relayed in a note by Raymond James analyst Savanthi Syth, were confirmed by an Allegiant spokeswoman. The industry concern is that exorbitant gasoline prices could sap consumers’ spending power and lead to slower demand for vacations and other leisure pursuits. Higher prices also raise costs for airlines, making it difficult to maintain profits if they can’t pass the expenses along to customers. Spot jet fuel prices for delivery in New York harbor have jumped 73% this year to $3.98 a gallon, the highest since 2008. In January US airlines were predicting they’d pay around $2.50 a gallon. Seattle-based Alaska sees continued strong demand for spring break and summer travel, but it cited fuel prices as a significant uncertainty. “The impact on the economy is the question we all have now,” CFO Shane Tackett said at a Raymond James conference.<br/>
