NWA: Fuel Prices Slowing Airline Recovery

We already know how much it hurts to pull in the gas station and say, "fill 'er up" (at least, those of us who either have willing and able children or are in the habit of talking to ourselves). Now imagine that means pouring thousands of gallons of Jet-A into the fuel tanks of a commercial aircraft and calculate the cost.

Oh, yikes.

Therein lies the rub for commercial carriers just now struggling to emerge from a three-year long economic slump. Now you know what's going through Richard Anderson's mind. He's the CEO of Northwest Airlines.

"Having the highest fuel prices since the 1990-91 time frame is very difficult for the whole industry," Anderson told the Minneapolis Star Tribune.

Anderson and his counterparts at other major airlines had hoped this would be the year they could wash the red ink from their hands and start the climb back toward profitability. With fuel prices at high -- sometimes, record -- levels, those prospects have dimmed a lot.

"It has a dampening effect on our important customer base, particularly here in the Midwest, because everyone is paying much higher prices to take their goods to market, to heat and power their plants and facilities," Anderson said.

The tremendous jump in fuel prices dims the bright spots on the commercial carrier landscape. The economy is improving and a lot of companies that laid off workers during the slump have started to hire again. But then, there are the low-cost carriers with which Northwest must compete. They now control 25-percent of the market and have so far been able to stave off fare hikes run up the flagpole by legacy carriers over the past couple of years.

FMI: www.nwa.com