Cheap Fuel, New Fees Keep Airlines Upbeat

CHARLOTTE, N.C. -- As a result of tumbling fuel prices, unprecedented capacity reductions and added revenue from new fees, several airlines reiterated their positive outlooks Tuesday, saying they expect a turnaround worth billions of dollars to their financial results.

At oil price levels around $50, Delta (DAL Quote) will pay $5 billion less for fuel in 2009 than it paid in 2008, President Ed Bastian said at the Credit Suisse airline investor conference. UAL (UAUA Quote), the parent of United, would save about $3 billion next year, said Chief Financial Officer Kathryn Mikells.

"The airline industry is of course also impacted [by recession]," Mikells said. "However, the capacity actions we announced earlier this year are serving us well. The drop-off we've seen in oil prices is poised to more than offset the impact from declining demand." ...