US Airlines remain strong despite fuel increases

Victoria
By Victoria January 27, 2012 18:34

US Airlines remain strong despite fuel increases


Most of the US airlines have posted results now and all have seen profits cut back sharply due to the rise of fuel costs. Airline fares have risen enough to take-up much of this additional cost, but still more needs to be done.

 

As we mentioned in December, buying into US airline shares where possible at that point was a sure bet in the short term, you would normally expect this week to be the high point for US airlines as fuel increases during 2012 further damages profits along with the question of how much further can air fares rise. Now though thanks to the failure of AA, there is a chance for massive consolidation in the US market that will allow a full round of fare increases to cover the possible oil problems that we may yet face.

 

At this point it is very important for us all to remember that the cyber war in the Middle East is raging but although Israel has had major success stalling the Iranian weapons program for many years, it may take the chance to push for a full military solution in the window prior to the US election. In any event, action by Iran at any stage will see a spike in oil prices that will set new records. The suggestion therefore is that all airlines that are able to should take this chance to hedge for 2012 if they have not already done so or else face a very uncertain 12 month period that could destroy the balance sheet.

 

Victoria
By Victoria January 27, 2012 18:34
Write a comment

No Comments

No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment

Only <a href="http://www.aviationnews-online.com/wp-login.php?redirect_to=http%3A%2F%2Fwww.aviationnews-online.com%2Fairline%2Fus-airlines-remain-strong-despite-fuel-increases%2F"> registered </a> users can comment.