Airlines and Fuel
I thought about recent talk on this board tonight as I was reading the first quarter financials for American Airlines. In the first quarter of 2007, American made $81 million. In the first quarter of 2008, they lost $328 million. Obviously, the management is completely incompetent, right? Or, maybe it's that. . . Their fuel cost for the quarter was $665 million more than they would have paid in 07 at the then prevailing prices. In other words, if the go-juice hadn't gone through the roof, they'd have made as much as they lost in the first quarter--the minus sign would have been a plus sign. And that would have been a considerable increase over 1Q07 profits. It is inescapable. Mergers or no mergers, the days of cheap flying are coming to an end. I know I've said it before, but how can you look at these numbers and think anything else? Oh, and don't ships use some sort of petroleum products as well?
