Airlines Industry Concerns

The airlines industries are concerned with some important factors. In 2007, the prices of air fuel increased. Jet fuel prices touched $80 per barrel. It heavily affected the profitability of the airlines industry. The rising prices of air fuel is a big challenge for the airline industry.

In 2007, it was projected by the International Air Transport Association (IATA) that the industry's fuel expenses will increase by $8 million and touch $119 billion.

Labor spats and low pensions also create some concerns for most airlines companies. An airline company, JetBlue, earned huge profits for many years. However, it has recently experienced losses due to its ongoing struggle with fast growth and increasing operating costs.

Even though air fuel costs have increased over the last few years, overall costs regarding air travel also have been reduced considerably. Airlines companies are competing with each other, and also keeping their air fares as low as possible. According to the Director General and CEO of IATA, the airlines industries allocation costs are lowered by 13 percent.

Allocation cost comprises selling of tickets, ticket processing as well as the processing of credit cards. They also added that costs other than fuel, component costs and per seat cost have been slashed by about 15 percent.