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Airlines Forced to Front Cash for Fuel

Can't afford to pay in advance for fuel

By Peter Fearon,  Newser Staff

Posted May 26, 2008 9:32 AM CDT

(Newser) – Cash-strapped airlines are now being pressured to pay millions of dollars in advance for aviation fuel, reports the Times of London. Mandatory prepayment for fuel has become common in the US and is now moving to Europe as crude oil prices continue to rise and the solvency of the industry is uncertain. Jet fuel costs have soared 60% since January.

“The airlines can’t afford it," said a US jet fuel consultant. "Traditionally, oil companies extended credit for 14 to 30 days. Now, most American airlines are on prepay."

A jet prepares to land at San Francisco International Airport. Airlines have found something in common with consumers struggling with fuel costs.
A jet prepares to land at San Francisco International Airport. Airlines have found something in common with consumers struggling with fuel costs.   (AP Photo)
Jet Blue aircraft at JFK airport in New York. Airlines have found something in common with consumers struggling with fuel costs.
Jet Blue aircraft at JFK airport in New York. Airlines have found something in common with consumers struggling with fuel costs.   (AP Photo)
A US Airways Airbus 319-112 takes off at the Tampa International Airport in Tampa. US Airways suffered a loss in the first quarter, punished like other airlines by the rising cost of jet fuel.
A US Airways Airbus 319-112 takes off at the Tampa International Airport in Tampa. US Airways suffered a loss in the first quarter, punished like other airlines by the rising cost of jet fuel.   (AP Photo)
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