dearJulius.com

Are Fare Hikes On the Horizon? American Airlines' CEO Thinks So

© American Airlines PHOTO: American Airlines 737. (photo courtesy of American Airlines)

By TravelPulse, Mia Taylor

During a recent telephone call with analysts and reporters, the airline’s CEO Doug Parker, said rising fuel costs are impacting airline profits and if the trend continues it will be consumers who ultimately pay the price.

“If indeed this is where fuel prices are going to stay, I would expect you would see higher fares to consumers over time,” Parker said, according to Associated Press.

The cost of fuel is the second largest expense for airlines, following labor. As a result, when fuel prices go up, ticket prices typically follow suit. At American Airlines, fuel prices are up 40 cents a gallon from one year ago, Associated Press reported.

The airline’s CEO also attributed a 45 percent drop in first-quarter profits to the increased fuel prices. American has slashed its earnings forecast for 2018, which triggered a six percent drop in its share price on the stock market to $42.56.

Although American has been working to phase out many older planes, which consume more gas, fuel spending has increased 26 percent. The airline used more than 1 billion gallons of gas in the first quarter, for which it paid an average of $2.10 per gallon, an increase from the 2017 price of $1.70 per gallon.

The airline said it would have saved $412 million if the fuel prices were still at early-2017 levels.

Parker said during the call this week that he does not believe fares will rise fast enough to dampen travel demand.

American made news this week on another front as well. The airline is facing a wrongful death lawsuit from the family of a woman who died after suffering a medical emergency during a flight two years ago.

The airline has also been dealing with negative publicity surrounding a warning issued by the National Association for the Advancement of Colored People (NAACP). Late last year the NAACP put out a national advisory warning African-Americans and other travelers about flying with American Airlines in wake of several incidents involving alleged discrimination.

COMMENTS





Note: If you think this story need more information or correction, feel free to comment below your opinion and reaction.
Name

Travel,1396,
ltr
item
Travel News: Are Fare Hikes On the Horizon? American Airlines' CEO Thinks So
Are Fare Hikes On the Horizon? American Airlines' CEO Thinks So
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaoOtclIEBWhd6VhrPCwogeugs2-zi_YKc5pCH5HYfMSYmdbkXkt28bJP-vxJW-twQHt4uOuZh2AhoSISCJ7Rx82p6igbjFzySEJPE9zzP4au5G13c6L2BVE4SaedbsasOE13wSI8xOMI/s1600/1.jpg
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgaoOtclIEBWhd6VhrPCwogeugs2-zi_YKc5pCH5HYfMSYmdbkXkt28bJP-vxJW-twQHt4uOuZh2AhoSISCJ7Rx82p6igbjFzySEJPE9zzP4au5G13c6L2BVE4SaedbsasOE13wSI8xOMI/s72-c/1.jpg
Travel News
https://travel.dailynewsview.com/2018/04/are-fare-hikes-on-horizon-american.html
https://travel.dailynewsview.com/
https://travel.dailynewsview.com/
https://travel.dailynewsview.com/2018/04/are-fare-hikes-on-horizon-american.html
true
6737428913629963530
UTF-8
Loaded All Posts Not found any posts VIEW ALL Read More Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share. STEP 2: Click the link you shared to unlock Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy