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Gold/Mining/Energy : PEAK OIL - The New Y2K or The Beginning of the Real End?
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From: Doug R5/19/2005 3:46:20 PM
   of 1183
 
Fuel costs to slam airlines in 2005
American carriers seen losing at least $5 billion

WASHINGTON - U.S. airlines will likely lose at least $5 billion this year along with more industry jobs due to high fuel costs, the head of the airlines' main trade group warned Congress Thursday.

Over the last four years, airlines have lost $32 billion during the industry's worst financial downturn. The airlines blame their woes on crude oil prices that have more than doubled, increased security costs and low fares brought on by intense competition.

"We are projecting additional losses of at least $5 billion in 2005," said James May, president of the Air Transport Association. "If oil stays high and our taxes with it, I expect more jobs lost, more flights cut and more airlines in crisis."

Testifying before a House subcommittee looking at the impact of high energy costs, May forecast U.S. airlines will pay an extra $6.8 billion for fuel this year than in 2004.

As a result, May said the airline industry is losing an estimated $17,000 every minute.

Eleven of the 12 passenger airlines rated by Standard & Poor's are considered "junk bond" quality, with only Southwest Airlines Inc. considered investment grade, he said.

Airlines consumed 18.6 billion gallons of jet fuel last year.

msnbc.msn.com
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