Airlines Industry Most Affected by Increase in Fuel Prices
December 28th, 2011 by admin
In recent times numerous changes have been made in the airline industry due to the hike in fuel prices. Airline industry is desperately trying to compete and battle with the ever increasing fuel prices.
Fuel expenses are one of the major concerns for the airline industry. Due to the rising fuel prices, airline industry often incurs massive losses. It is estimated that each one-dollar increase in the price per barrel of crude oil results in between USD 415 million to USD 450 million in greater annualized operating expenses.
Even if airlines can cope up with the pricing, passengers remain minutely sensitive to price rise, thereby reducing traffic.
It is predicted that three companies, Delta-Northwest, United-Continental, and the recently closed Southwest-AirTran, will be accounting for nearly 65 percent of the domestic airline capacity
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