American Airlines lost $436 million in the first quarter as it battled rising jet fuel prices, foreshadowing huge losses at other U.S. airlines.
American responded to the grim numbers Wednesday by announcing it will scale back plans to add new flights and retire at least 25 older, gas-guzzling planes later this year.
Prices for jet fuel have been rising sharply since September, and American spent $1.8 billion on fuel in the first quarter — an increase of $366 million or 25 percent from this time last year.
More airlines will probably post huge losses this quarter. The TSA’s strip and grope regime continues to drive passengers away as well. The airlines’ effort to raise revenue by hiking baggage prices also doesn’t seem to be helping. Only the bare bones carriers like Southwest seem to have figured out how to keep thriving in the Age of Obamanomics.
I’m curious, what will happen if AA and another major carrier get into real financial trouble — more so than they already are? They have been bailed out before. Could we be looking at yet another government industry takeover?