Wednesday, April 18, 2012

Stunning Fact: Fuel is 36% of Delta Airlines Total Costs

If you are wondering why airline tickets have gotten so expensive, look no further than the explosion of fuel costs that Delta Airlines has experienced since 2000.  Delta's fuel costs have jumped from 13% of its total costs in 2000 to 36% in 2011, according to fascinating data gathered by Andy Maykuth in today's Philadelphia Inquirer.  Fuel costs for Delta even reached 39% of its total costs in 2008.

The $11.8 billion that Delta spent during 2011 on fuel is painful to Delta, its shareholders and consumers, and so Delta is reported to be interested in buying the ConocoPhillips refinery in the Philadelphia suburbs in an effort to control its fuel costs.  The purchase would be good for the employees formerly employed at the refinery and possibly for regional fuel prices. 

High fuel cost is the necessity motivating Delta to innovate the airline business model.  I wish it good luck in doing so.

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