Higher fuel prices have lowered profit margins for US carrier during the first half of 2012 and airline shares have started to show signs of that pressure on the bottom line. The Guggenheim Airline ETF has fallen 12.5%.
According to Airlines for America (A4A), US airlines expenses during the first half of the year have increased by 9.4%, while profit margins have fallen -1.5% in the first half of 2012 from -0.4% in the same period a year ago. An increase of 13.1% in fuel costs is largely to blame for the decline in profit margins.
"There is a lot of pressure on carriers of all shapes and sizes, not just in the US but across the globe, to continue to find ways to cut costs, expand revenues and improve productivity," A4A chief economist John P. Heimlich said.
US airline stocks falter as costs rise
