High fuel costs hurt US carriers in the first quarter, resulting in some heavy losses. The impact of fuel prices varied with "hedging" - buying fuel in advance at set prices. While Delta Air Lines kept fuel price increases below 40%, Trans World Airlines saw costs almost double. South-west Airlines has just begun hedging after fuel costs rose 130% against the same quarter in 1999.
Higher revenues and an underlying improvement in performance offset fuel hikes at most airlines. Operating revenues improved across the board, from a high of 14% at American Airlines to a low of 6% at TWA. Operating profits rose at American and United Airlines, were flat at Delta and Southwest, and fell at US Airways, TWA, America West and Alaska.
Fuel costs increased net losses at already troubled TWA to $76 million, from a loss of $22 million last year. US Airways posted a worse-than-expected net loss of $115 million, blaming labour unrest, bad weather and fuel costs. America West attributes a drop in net profit to just $12 million, to fuel costs, as does Alaska, which reported a net loss of $7.5 million for the quarter. The outlook is brighter, with most US airlines reporting strong advance bookings for the second quarter and saying fuel prices are moderating.
Source: Flight International
