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

Qantas and American Airlines are working on a proposal for alliance, and Qantas has said that such a partnership would help slash airline fares in the US. The two companies envision substantial drop in airline fares to almost two out of three US destinations. Qantas also spoke about a possible 'walkabout' plan for U.S. to Australia/New Zealand, where travelers can help cut airlines fares between the two countries.
Qantas revealed the information about the proposed business alliance to Australian Competition and Consumer Commission, and pointed out the possible reduction in airline fares to bolster its case. Its refined structure for airline fares showed that cities like Philadelphia, Detroit and Indianapolis could see airline fares drop by almost $700, while places like Seattle, Washington DC and Boston will not see significant reduction in airline fares.

A survey of 15,000 passengers by Consumer Reports magazine has revealed that Southwest Airlines has topped the list of the most preferred airlines by receiving the highest airline ratings by the customers. The airline ratings were based on factors such as in-flight entertainment, baggage handling etc. However, the most important aspect that concerns most travelers while choosing the best airline is the airline cost. Increasing fuel prices have been a dampener for those airlines who were looking to receive the highest in the airline ratings, especially with summer holidays round the corner.
Jet Blue Airlines came in second- courtesy their spacious seats and personal televisions. On the other hand, U.S. Airways finished off last as it failed miserably in the customer satisfaction survey.