How Fuel Costs Have Affected the Airline Industry

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Continuingly increasing fuel prices have caused incredible turbulence in the airline industry. The impact on the airlines themselves, as well as business performance and the impact on travelers, are all of great significance. The airline industry that was already in stress due to the decline of the tourism industry is still greatly affected by increasing fuel price - a factor which has been incredibly negative on the airline industry.


The aim of this paper is to discuss all of this, as well as all characteristics and factors involved in the matter of how fuel costs have affected the airline industry. This is what will be dissertated in the following.
The six most primary airlines in the United States have been ailing since 2001; four out of these six were in fact forced to file for bankruptcy in 2005. According to some analysts, the entire airline industry is on the brink of collapse altogether; the primary cause being that of ever-increasing fuel prices. "It's very bad right now, it's unsustainable," said Kevin Mitchell, Chairman of the Business Travel Coalition based in Pennsylvania. "It's as bad as it gets. If (oil) goes up another couple of dollars it's going to be more of a pain but it's going to be hardly distinguishable from the pain that the airlines are feeling right now." (Delaney, 2006). In fact, according to Mitchell, the American airline industry basically refused entirely even to recognize the shift in the marketplace five years ago. "They failed to understand that consumers were demanding everyday, low, affordable airfares. The carriers in Europe recognized that and began to take action in 2001 and 2002 to become competitive with low-cost carriers. ...
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