This is an excerpt from EERE Network News, a weekly electronic newsletter.

April 19, 2006

Analysis: Airline Industry is Hamstrung by Rising Fuel Prices

Jet fuel prices are on their way up, and that's bad news for the airline industry, according to the Air Transport Association (ATA). The airline association notes that crude oil prices are expected to average nearly $70 per barrel this summer, and jet fuel recently hit a peak price of $2 per gallon, a significant increase over the average price of $1.45 for the first quarter of 2005. According to the ATA, airline fuel efficiency has tripled since 1971, and as of 2005 had reached 44.4 passenger miles per gallon. This increased efficiency is partly due to fuller flights, but airlines are also making efforts to cut unnecessary weight, lower cruising speeds, taxi with only one engine, and use air terminal power sources for electricity and air conditioning while on the ground. The ATA is currently pushing for changes to air traffic control rules, which it claims could save an additional hundreds of millions of gallons of jet fuel per year. See the ATA press release and a related question and answer Web page.

Of course, if you skip the flight and choose to drive instead, you'll also be dealing with higher fuel costs. According to the Fuel Gauge Report from the American Automobile Association, the average U.S. price for mid-octane unleaded gasoline is quickly approaching $3 per gallon. Like jet fuel, gasoline prices are going up as crude oil futures are hitting $70 per barrel. See the Fuel Gage Report for the latest gasoline prices, and for the latest futures price for crude oil, see the New York Mercantile Exchange Web site.

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