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Jet Fuel Costs Ground American Airlines Flights

Posted on: Friday, 30 September 2005, 21:00 CDT

By Eric Torbenson, The Dallas Morning News

Oct. 1--Jet fuel is getting so expensive that for some carriers, it will be cheaper to ground some flights than fly them.

American Airlines Inc. said Friday it would cancel 15 flights -- including 13 from Dallas/Fort Worth International Airport -- from Wednesday to Oct. 29 because of spiking jet fuel prices.

No cities were eliminated from the schedule at D/FW, American's largest hub. The Fort Worth-based carrier said all passengers will be accommodated on other flights at different times.

The flights may be restarted depending on what happens with fuel prices, which have reached record highs after Hurricanes Katrina and Rita knocked out substantial refining capacity along the Gulf of Mexico.

With the refining costs reflected along with the base price of crude oil, airlines are paying about $110 per barrel of oil. Crude for November delivery fell 55 cents Friday to $66.24.

"Jet fuel prices have been rising even faster than crude oil prices for the last year, but it was the 39 percent rise in jet fuel costs in the last month alone that pushed us to make this decision," said Dan Garton, American's executive vice president of marketing, in a prepared statement.

"We have made incredible progress in lowering our operational costs for over two years now," he said. "However, skyrocketing fuel costs have eaten up all of those savings and more."

Canceled D/FW flights include: One each to Atlanta, Denver, El Paso, Newark, N.J., Dulles International Airport outside Washington, D.C., Houston Bush Intercontinental, Kansas City, Chicago O'Hare International, Toronto, Minneapolis/St. Paul and Tulsa.

Two daily flights between D/FW and Austin will also be suspended.

At O'Hare, American's second largest hub, the carrier is suspending one flight each to Houston Intercontinental and Toronto. American also will indefinitely suspend service between Chicago and Nagoya, Japan at the end of October.

The flights canceled were carefully picked by American to have the least effect on the carrier's schedule and passengers, said spokesman Tim Smith.

Except for Chicago-Nagoya, all the affected routes have lots of other American flights, and the carrier simply looked at future bookings to pick routes where passengers could be accommodated with relative ease.

Also, the fall typically sees a drop-off in traffic from the busy summer season.

American has no further plans to thin its schedule, Mr. Smith said. The carrier flies about 3,800 daily flights, more than 800 from D/FW.

Some analysts have wondered when American, which has the strongest cash position of the carriers that aren't in bankruptcy, might look to invest in more fuel-efficient aircraft.

American has no plans to add new planes, Mr. Smith said.

Also Friday, Continental Airlines Inc. raised most airfares $10 each way in an attempt to offset jet fuel prices and warned that it too may cancel some flights. Delta Air Lines Inc. also is considering thinning its schedule, according to news reports.

Shares of American parent AMR Corp. rose 43 cents to $11.18 Friday.

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Source: The Dallas Morning News

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