How Has The Oil Slump Impacted American Airlines’ Operating Margins?
The 50% fall in crude oil prices during 2015 led to a sharp decline in jet fuel costs for most of the airlines. American Airlines does not hedge its fuel consumption, which enabled it to realize the full benefit of the plummeting crude prices. In 2015, the network carrier’s fuel expense dropped over 40%, resulting in a margin expansion of close to 5%.
Have more questions about American Airlines (NYSE:AAL)? See the following links:
- How Has American Airlines’ Revenue And EBITDA Composition Changes Over The Last Five Years?
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- Is American Airlines Better-Off Post Merger Or Is It Merely Flying On The Oil Price Slump?
- 2015 Earnings Review: American Airlines’ Earnings Surge Due To Lower Fuel Costs, Despite A Fall In Top Line
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for American Airlines
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