This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
American Airlines CEO Doug Parker announced Thursday morning that rising fuel costs are gouging the carrier’s profits, and will drive up airfares.
“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 Thursday during a Q1 2018 earnings call. Jet fuel is the airline’s second-biggest expense after labor, so when costs go up, so do ticket prices; for American Airlines, costs had risen 40 cents a gallon from a year ago, leading to adjusted earning expectations for 2018 after a 45%, or $186 million, drop in first-quarter profit.
Shares fell $2.69, or 6%, to $42.56 in trading shortly after the opening bell on Wall Street following Parker’s announcement. While American – the world’s largest airline – has heavily invested in replacing older gas-guzzling aircraft in favor of new, more efficient planes, fuel expenses have jumped 26%. Over the first quarter of 2018, American Airlines burned just more than 1 billion gallons at an average cost of $2.10 per gallon, up from $1.70 a year earlier, and Parker estimated that the carrier could have saved $412 million if per-gallon fuel costs were still fixed at early 2017 prices.
Not all numbers were on the decline for American Airlines: Passenger revenue per mile has risen by 3% compared to Q1 2017, while revenue rose by almost 6%, to $10.4 billion. Still, American cut its 2018 profit forecast to between $5 and $6 per share – a $0.50 drop from its January 2018 predictions.
Featured photo courtesy of Getty Images.
The American Express Platinum card has some of the best perks out there: cardholders enjoy the best domestic lounge access (Delta SkyClubs, Centurion Lounges, and Priority Pass), a $200 annual airline fee credit as well as up to $200 in Uber credits, and mid-tier elite status at SPG, Marriott, and Hilton. Combined with the 60,000 point welcome offer -- worth $1,140 based on TPG's valuations -- this card is a no-brainer for frequent travelers. Here are 5 reasons you should consider this card, as well as how you can figure out if the $550 annual fee makes sense for you.
- Earn 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.
- Enjoy Uber VIP status and free rides in the U.S. up to $15 each month, plus a bonus $20 in December. That can be up to $200 in annual Uber savings.
- 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel.
- 5X Membership Rewards points on prepaid hotels booked on amextravel.com.
- Enjoy access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
- Receive complimentary benefits with an average total value of $550 with Fine Hotels & Resorts. Learn More.
- $200 Airline Fee Credit, up to $200 per calendar year in baggage fees and more at one qualifying airline.
- Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your Platinum Card®. Enrollment required.
- $550 annual fee.
- Terms Apply.
- See Rates & Fees
Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
