Expect Higher Airfares, American Airlines Warns

Above, the San Gabriel Mountains from an American Airlines flight. Photo by Armand Vaquer.

Although the gasoline prices in New Mexico (where I live) is still about a dollar less than California's, I have noticed a steady climb (gasoline prices are about thirty cents higher than three months ago) in recent weeks. 

So has American Airlines. An article in Japan Today reports that American Airlines warns that higher fares are coming. They mainly blame rising fuel costs.

According to the article:

DALLAS - Rising fuel costs are eating into airline profits, dampening expectations for the rest of 2018, and setting the stage for higher fares. 

Fuel is the airlines' second-biggest expense after labor, so when it rises — at American it was up 40 cents a gallon from a year ago — so does the cost of providing air travel, says American Airlines CEO Doug Parker. 

"If indeed this is where fuel prices are going to stay, I would expect you would see higher fares to consumers over time," Parker said. 

American blamed higher fuel prices for a 45 percent drop in first-quarter profit, to $186 million.

To read more, go here.