Airline Shares Bounce Back as Oil Prices Fall

Analyst predicts carriers could be back in the black next year
By Rob Quinn,  Newser Staff
Posted Aug 12, 2008 2:30 AM CDT
A US Airways jet takes off behind an American Airlines jet in Phoenix. Checked bags are now a moneymaker for both airlines, which are unlikely to drop baggage fees even with a return to profitability.   (AP Photo/Matt York)
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(Newser) – Airline shares rose yesterday following an analyst's prediction that the big carriers could be back in the black by next year, reports the Wall Street Journal. The stocks have been recovering since mid-July as oil prices started to slip downward and the industry's cost-cutting and revenue-boosting measures began to take effect.

The surge in oil prices cost the airlines billions last quarter, and experts warn that any recent gains for the industry could be swiftly reversed if prices start soaring again. A return to profitability for the major carriers is unlikely to pay off for passengers, as reduced capacity will continue to limit choice and airlines are unlikely to jettison new fees tacked on in recent months.