U.S. Airlines Hope to Charge Passengers More as Fuel Prices Climb
Skift Take
U.S. airlines got a little fat and happy when fuel prices were at historically low levels. Passengers loved it too, because prices on competitive routes came down. But that's ending now, and travelers should get used to the new normal.
The recent series of earnings calls from airlines makes one thing clear: the rapid rise in fuel prices is starting to drive strategy across the industry and that may result in passengers paying more to fly.
Perhaps Doug Parker, the CEO of American Airlines, captured it best on his earnings call last week: “To the extent any of us were viewing this quick run-up as a spike that would quickly correct itself, we should abandon that notion.
"The fact is there are many activities that make sense at $45 a barrel of oil, which no longer make sense at $75 per barrel," Parker noted.
When oil is cheap, U.S. airlines executives often get giddy, ordering aircraft and launching routes that wouldn't have been viable a few years earlier.
It doesn't happen right away, of course.
First, with memories of an earlier price spike still fresh, executives are often careful, telling Wall Street they plan to engage in “capacity discipline,” by limiting new flights. Travelers may remember 2
