The airline industry is perhaps the most affected by high fuel costs as prices have skyrocketed in a short amount of time. According to the Air Transport Association, fuel expenses are expected to total $61.2 billion this year, an almost 50 percent increase over last year's $41.2 billion. American Airlines, spending about 30% of its operating costs on fuel, has begun charging additional fees for food, drink, and luggage to compensate for their higher overhead costs. Others, like U.S. Airways, are "retiring jets, cutting domestic seating capacity by as much as 8 percent by the end of this year, and eliminating 1,700 jobs to lower operating costs and reduce fuel use." The situation is extremely dire. A report by the Business Travel Coalition warns, "already-depleted cash reserves are dwindling fast, and unless the fuel crisis lessens, airlines face not the now-familiar protracted restructuring in bankruptcy, but outright and immediate extinction."
Cutting edge aircrafts, like the Boeing 787 Dreamliner, have only been able to decrease fuel consumption by 20%. Even with more efficient operating procedures, the decline in consumption is minimal. Southwest Airlines, for example, saved 8% of fuel costs by slowing flights down by 1-3 minutes. However, these gains pale in comparison to the increase in costs caused by aviation fuel prices tripling since 2000. Tim Wagner, an American Airlines spokesman, states succinctly, "The airlines are simply not designed to handle oil at this price."
The record proves it, as Bradford Plumer of The New Republic reports, "Twenty-five airlines have gone belly-up this year - three to four times the usual yearly rate." Still functioning airlines have been forced to eliminate less traveled routes and less accessed hubs in order to ...