Managing Fuel Costs
Fuel costs have risen to become the single largest expense in the airline industry, reflected by statements in 2006 airline 10-K filings:
"Fuel costs constitute the largest percentage of our total operating costs."
"Historically fuel costs have been 10-15% of our operating costs. Today, they are 20-30%."
"The airline industry is intensely competitive."
"Due to the competitive nature of the airline industry, we may not be able to pass on increases in fuel prices by increasing fares."
"If fuel costs continue to increase, our customers may reduce the volume and frequency of cargo shipments and find less costly alternatives such as land and sea carriers."
