Ready for a jet fuel spike?

Daily Freeman (Kingston, NY) - - BUSINESS -

Air­lines have soared to record prof­its in the past few years thanks to low fuel prices.

Cheap fuel has en­abled them to cut air­fares and of­fer raises to flight at­ten­dants, pi­lots, me­chan­ics and ground crews. But the cost of oil can’t stay low for­ever. And with higher ex­penses and lower rev­enue, some air­lines might strug­gle to turn a profit if faced with a sud­den fuel price spike.

Some air­lines are bet­ter pre­pared than oth­ers. Dis­coun­ters like Spirit Air­lines pack more pas­sen­gers into jets — mak­ing them more fuel ef­fi­cient on a per pas­sen­ger ba­sis. Oth­ers, like Alaska Air­lines, fly a younger fleet of jets which guz­zle less gas.

The three largest U.S. air­lines — Amer­i­can, Delta and United — con­sume the most fuel and would be hurt the most by a fuel spike. They are quickly up­dat­ing their fleets with more fuel-ef­fi­cient air­craft. But will those new planes all en­ter ser­vice be­fore oil prices climb again?

Oil, which sold for above $100 a bar­rel in mid-2014, has strug­gled to top $50 of late. But a price spike could be trig­gered by geopo­lit­i­cal ten­sions or a sud­den shift in sup­ply and de­mand, as the air­line in­dus­try has seen in the past.

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