I never said fuel wasn't the highest cost. Fuel is essentially an uncontrollable cost, though. The plane needs fuel, and the price of fuel is not set by management. Likewise, management can't cut the fuel amount on a given flight by 50% to trim costs. Fuel hedges help stabilize costs, but no airline hedges 100% of its fuel.

What I said was labor is the highest CONTROLLABLE cost in our industry. Labor is a controllable cost, in that management can negotiate or set wages, depending on the labor group. Benefits can also be changed to save money, especially for the non-unionized workers at your company. Other controllable costs include catering, cleaning, and advertising.

My point was that even though labor costs are the largest controllable expense, cuts in labor costs by airlines rarely change the airlines' financial condition appreciably.