Jet Fuel Price Drop Gives Airlines Some Room? No (AMR)(DAL)(UAUA)

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Jet fuel prices dropped in November as did passenger traffic. Just this last summer, people were flying but the cost of fuel was pushing big carriers toward bankruptcy.

Fuel prices were such an issue that AMR (AMR) dropped to $4 from a 52-week high of $17.25. Delta (DAL) and United (UAUA) has similar drops. AMR has rebounded to $9.50.

Based on the November airline passenger data and the deepening recession, businesses and consumer could cut travel at record rates, leaving carriers facing huge drops in revenue.

If OPEC tightens exports and the number of rigs drilling for oil continues to fall, the nation’s big carriers will be back to where they were six months ago–in really deep trouble.

Douglas A. McIntyre