Oil’s descent will help airlines take off

U.S. carriers are still paying a high price for fuel months after oil prices plunged, and it’s likely to hurt earnings they will announce this month and erode their cash reserves.

But the pain at the pump should be short-lived, with money-losing jet-fuel hedges for United Airlines and other carriers expiring in a few months. That could lead to an unprecedented windfall for carriers as the full benefit of cheap oil kicks in.

In total, domestic airlines could earn upward of $3.5 billion this year after losing an estimated $4.5 billion in 2008, predicted Vaughn Cordle, a former airline pilot who is chief executive and founder of AirlineForecasts LLC.
ChicagoTribune