Originally Posted by
Brian3613
I'm really concerned that the dramatic rise in oil will effect job prospects in the airline industry. According to news reports American Airlines has and will be laying off thousands of employees due to the spike in oil costs. I afraid other air carriers will soon follow.
There is no doubt that high oil prices affect the airline industry as well as other aspects of transportation. However, I believe high oil prices to be but a
symptom of a much bigger problem - and that problem is the inability of most carriers to pass on higher costs of doing business to the consumer.
Please don't misunderstand me because I am in no way trying to minimize the enormity of the relationship of high fuel prices to profits. I just believe the bigger problem lies in the fact that the airline industry has great difficulty in passing along costs to the consumer. i.e., it has been selling and continues to sell a product for less money then it takes to produce. Until that problem is solved I don't think we will see much in the way of financial stability in the industry regardless of fuel prices.