US Airways (US) is optimistic it will be able to pass on the majority of 2012 fuel cost spikes to the customer and remain profitable.
The carrier reported a $71 million profit for 2011 even though its fuel costs were $1.2 billion higher than 2010 as oil prices skyrocketed. When it faced a similar fuel-spike situation in 2008, US lost $808 million. US chairman and CEO Doug Parker said the difference in 2011 was that the airline was able to pass on 85% of the increase to passengers.
“The outlook for 2012 is uncertain, but we will be able to do the things we did in 2011 and there’s a strong demand environment for leisure and business travel. Booking demand is really strong and the economy feels like it’s on a bit of firmer footing, so we are cautiously optimistic for 2012,” Parker said during a company briefing Wednesday in Phoenix, Ariz.
“Fuel prices have been up quite a bit this year, but we have been encouraged by the [US airline] industry’s ability to cope with that and handle these events. Certainly, it feels like we can handle it,” Parker told. “What we do know is that as oil prices have risen to record levels, the industry and US Airways can handle it and we expect to remain profitable.”
US senior VP-marketing and planning Andrew Nocella added, “I think we can say with some confidence that even with a normal fuel price spike environment, which we saw last year and at the beginning of this year, our ability to adapt and pass that to the customer is high. I have faith we can ride out that storm if it comes.”
US is scheduled to take delivery of 12 Airbus A320s this year; 16 more A320s and five A330s in 2013; 18 A320s and three A330s in 2014; and 12 A320s in 2015. All of those aircraft will be replacements.
Article Source : ATW Daily News
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