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Skyrocketing jet fuel prices threaten airlines

The nation`s airlines today called upon the government to tap the Strategic Petroleum Reserve (SPR) to moderate the…

The nation`s airlines today called upon the government to tap the Strategic Petroleum Reserve (SPR) to moderate the adverse impact that alarmingly high fuel costs are having on the USA`s economy. Stressing that high fuel prices are combining with escalating security and insurance costs to undermine the airline industry`s massive cost-cutting self-help efforts, Air Transport Association (ATA) President and CEO James C. May testified today before the Senate Energy and Natural Resources Committee that, Fuel prices are beyond our ability to battle alone.



May noted that in the past 12 months, spot fuel prices have increased in excess of 100 percent, from 57 cents per gallon in February 2002 to over $1.20 per gallon in February 2003-an increase not seen since the Persian Gulf War buildup in the fall of 1990. Every penny increase in the price of jet fuel costs the airline industry $180 million a year, May emphasized.



To alleviate the crisis, and boost the U.S. economy, May urged Congress to take two vital actions:



  1. press for the release of at least one million barrels of oil per day from the SPR and

  2. repeal the 4.3 cents per gallon jet fuel deficit-reduction tax adopted in 1993 that adds $600 million annually to the airlines` fuel cost burden.


May concluded, In the past, the use of the SPR has sometimes come too late to help the economy. This time, we hope the administration will act quickly.



The Air Transport Association of America, Inc. is the trade association for leading U.S. airlines. ATA members transport over 95 percent of all the passenger and cargo traffic in the United States.

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