US airline industry's fuel bill to touch $61 billion this year

The Air Transport Association has indicated that the US airline industry's fuel bill this year will touch at least $61 billion mark, compared with 2007's $41 billion and 2006's $32 billion.

A year ago, US airlines were enjoying welcome profits after a half-decade of big losses. The 10 largest carriers together earned $3.7 billion in the second quarter of 2007, the industry's best second quarter since 2000, highlighted The Dallas Morning News. However, going forward, the consensus among industry analysts is that the same 10 carriers will lose around $750 million in the quarter, on their way to an estimated full-year 2008 loss approaching $6 billion.

Of the group, analysts are expecting only Delta Air Lines Inc. and Southwest Airlines Co. to report second-quarter profits – Delta, about $32 million, and Southwest, about $80 million. Analysts expect AMR Corp., parent of American Airlines Inc., to lose $342 million in the second quarter. UAL Corp., parent of United Airlines Inc., is projected to lose $220 million. Those numbers don't include large one-time losses, mostly non-cash, that AMR and UAL plan to announce.

Meanwhile, a coalition of US airlines is calling for tighter regulation of trading in petroleum futures contracts, which they cite as a major source of record fuel prices. An open letter sent by the CEOs of 12 major airlines, including Northwest, American, United, Delta and Air Tran, called on customers to contact their representatives in Congress to demand they deal with "poorly regulated market speculation."

The airline chiefs assert that speculation may account for as much as $30 to $60 a barrel—that is, as much as 43 percent—of the current $140-plus price of oil. They note that controls over oil futures trading have been relaxed or scrapped over the past period.