US Airlines Cutting Flights Over Rising Fuel Costs

Airlines in the U.S. are facing fuel costs that haven’t been seen since 2008, this is a consequence of the ongoing war between Russia and Ukraine.

Fuel is one of an airlines biggest operating expense, it accounts for 15-20% of a carrier’s total operating cost. Since late February fuel prices have only been going up, the expected fuel price for March was 2.45 to 2.50 per gallon, in reality, it’s 2.60 to 2.65 per gallon, almost a 10% rise, global crude oil benchmark, Brent crude is up 26% percent. For example, a Boeing 737 now costs about $36,000 to fuel compared to $24,000 before, this is a 50% rise.

Airlines are feeling the impact of this, many not wanting to raise ticket prices have been cutting flights from their schedule, Allegiant has said they would cut their Q2 schedules up to 10% as a result, Alaska Airlines has said they expected their capacity to be down 3-5% in the first half of the year, but they did still expect growth for the second half. The big three, American, Delta and United Airlines have all said that they wouldn’t cut any flights or raise ticket prices. Meanwhile, Breeze Airways, a relatively new carrier said that it expected the rise to add about $5 an hour per passenger in operating cost, at the moment they won't be raising prices, but should fuel continue to go up they’re going to have to raise their ticket prices.