I read this week that the spot price for a gallon of jet fuel hit $3.80 per gallon this week. That is beyond shocking, and I don’t know if airlines will ever be able to raise fares to a level that will allow them to make money with fuel prices approaching $4 dollars per gallon.
I do believe that the speculative bubble that oil prices have become will eventually burst, but I certainly don’t know when that will be. In the meantime, airlines are in deep yogurt. I really think they are facing a challenge that exceeds that of 9/11, and if you’ve read my blog, you know I don’t take 9/11 lightly.
Jet fuel at these prices is a game-changer. Expect widespread schedule cuts and aircraft groundings in the near future, and with that, employee layoffs.