U.S. Airlines Face Dilemma Over Raising Fares as Fuel Jumps
- Cutting capacity to boost prices threatens pandemic recovery
- ‘There are some tough choices to be made,’ analyst says
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U.S. airlines are unlikely to raise fares enough to completely offset jet-fuel costs that are at their highest levels in more than a decade, pulling the industry’s shares down the most in the S&P 500.
Uncertainty over global oil supply has boosted prices since Russia invaded Ukraine on Feb. 24. The spot jet-fuel price in New York harbor has surged 57% since the start of 2022 to $3.61 a gallon Monday, the highest since 2008. As recently as January, the biggest U.S. airlines forecast jet fuel at no more than $2.50 or so for the first quarter.