Volatility and the uncertainty surrounding fuel costs have made it all but impossible to develop long-term business strategies, a top executive at American Airlines parent AMR Corp says.
Speaking today at the annual Boyd aviation forecast conference in Aspen, AMR VP, state and community affairs Kevin Cox said the top three issues affecting the airline industry are "fuel, and fuel and fuel", and that this reality "has not allowed, for good bad or indifferent, for long-term vision".
To help remedy this instability, US airlines under the auspices of the Air Transport Association (ATA) of America have called for a more comprehensive energy policy and lobbied Congress to regulate speculators in oil markets.
Additional drilling and alternative fuels are among the issues that must be considered, suggests Cox.
Engaging other stakeholder's such as local government and airports in a solution to improve efficiency is also part of American's effort to carve out a business model that takes into account oil at $100 per gallon.
Like many other US carriers, American is in the midst of a broad cost-cutting initiative, including slashing capacity. Cox says he met with 100 mayors on 3 October, all of whom "were yelling and screaming about how we were cutting capacity".
He explained, however, that until airlines "get some sort of long-term sight on where jet fuel is going to go, it is going to remain the focus on everything we do".
Source: Air Transport Intelligence news
