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Published at Tuesday, April 02nd, 2019 - 16:30:37 PM. Type of airline. By Anson Busch.

A second financial issue is that of hedging oil and fuel purchases which are usually second only to labor in its relative cost to the company. However with the current high fuel prices it has become the largest cost to an airline. Legacy airlines compared with new entrants have been hit harder by rising fuel prices partly due to the running of older less fuel efficient aircraft. 44 While hedging instruments can be expensive they can easily pay for themselves many times over in periods of increasing fuel costs such as in the 2000–2005 period.

The extent of these pricing phenomena is strongest in legacy carriers. In contrast low fare carriers usually offer pre-announced and simplified price structure and sometimes quote prices for each leg of a trip separately.



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