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American Airlines CEO sends strong warning about airfare prices
thestreet.com • • business
Key Points:
- Jet fuel prices averaged $4.53 per gallon for the week ending Sept. 18, marking nearly an 80% increase from a year ago, driven largely by the war in Iran and the closure of the Strait of Hormuz.
- Major and regional airlines are restructuring flight networks and cutting less profitable routes to manage soaring fuel costs, with American Airlines suspending several domestic flights, especially at Los Angeles International Airport.
- American Airlines CEO Robert Isom indicated potential capacity adjustments if high fuel prices persist, though he expects a 16% to 19% revenue increase in Q3, attributing resilience to strong demand for premium seats generating significant revenue.
- Executives from United Airlines and Southwest Airlines also emphasized a focus on profitability over market share, signaling possible further capacity reductions if fuel prices remain elevated.
- While not directly addressed at the recent conference, airline leaders have previously indicated that sustained high jet fuel prices will likely lead to increased airfare to offset rising operational costs.
