Soaring fuel prices significantly worsened by Hurricane Katrina are being blamed for a projected 10 billion dollar loss for 2005 by U.S airlines. The
expected losses rose from previous figures of $7 billion and industry exectutives plan to request a tax relief from congress at a senate hearing next
week. Jet fuel prices have gone down slightly since peaking at a high of $2.36 per gallon two days after the hurricane which ravaged Louisiana and
Mississippi, to Fridays trade of $1.99 P.G. Prior to Katrina the price was $1.91 per gallon.
The biggest airlines burn the most fuel, but they have struggled to raise fares in the face of fierce competition from low-cost rivals. The big
airlines have long complained about taxes and fees that can account for more than a quarter of the price of a ticket.
Mike Boyd, a Colorado-based industry consultant, said fuel and fuel alone is driving substantial industry losses just as traffic returned this spring
and summer to levels not seen since before the September 11, 2001, hijacked aircraft attacks.
Since the hurricane struck, big airlines are loading extra fuel on some flights rather than risking their operations to potential supply shortages or
slowdowns at certain airports in the Northeast and Southeast.
Rising oil prices also prompted national passenger railroad Amtrak on Friday to announce fare increases of between 5 percent and 7 percent for most
service. The average fare nationally will increase $3 while the average will go up $4 in the Northeast, where Amtrak runs its flagship service.
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Amtrack has also announced price rises, also blaming the rising cost of oil. Increases for amtrack fares are expected to average between $3 and $4.
Held to ransom again. This all could cause a total collapse of the economic market as the fallout for this tragedy spreads.
Yeah the airlines have been hit hard. I expect to see increased fuel surcharges on tickets being sold. Some airlines will do okay. Southwest had
enough money to hedge its fuel costs so it sitting pretty, plus its adding newer and newer fuel efficent planes and adding the winglets to others
which also decreases fuel burn.
THe legacy carriers are in trouble and a few will die. Delta has my money as being the first.
I dont see how all these large airlines are in dire trouble.
Perhaps they just haven't adapted to the market as it now stands, as the likes of RyanAir in Europe are showing profits.
American airlines increasing ticket prices by $3-4 while RyanAir have tickets for less than that....
The money is in the extra's, has been for a long time.
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