Since September 11th 2001 the airlines have been impacted financially, affected by passengers’ fear of flying, recessions, the rising cost of fuel, and the simple fact that the old style of running an airline wasn’t working anymore. There were some hard times as airline after airline declared bankruptcy and or was forced to merge with another airline just to survive. However, in recent time the airlines have flourished, making record profits. The International Air Transport Association projected profits for the airline industry of $29.3 billion in 2015, which is up nearly 80 percent from last year. (Gulliver 2015) American Airlines booked $1.2 billion in profit during the 2nd quarter of 2015, making that quarter its most profitable three months in history. (Harwell, 2105)
The airline industry recovery can be attributed to a number of different factors. The reduced cost of jet
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High fuel costs were one of the reasons that in the past the airline industry was struggling. Fuel prices have fallen about 40 percent in the past year, and with U.S. airlines spending more on fuel than any other operating supply, a drop in price can make or break a profit margin. Airlines burn around 40 million gallons of fuel a day. American, Delta, Southwest and United Airlines saved about $3.3 billion on fuel in the first quarter of 2015. (Harwell 2015) Analysts believe that airlines throughout the world will spend around $70 billion less on fuel in 2015 than in 2014. Including the impact of hedging contracts and the strength of the US dollar, the net effect will probably be closer to $35 billion (Broderick 2015), and analysts believe that the seven U.S. airlines will probably end up paying a net of $15 billion less for fuel this year. Saving that much money on fuel alone is a good start on making a profit, but there is much more to airline profitability than just reducing operating