Fuel costs continue to hammer industry
Rocky wire reports
Published May 19, 2008 at 7 p.m.
United Airlines parent UAL Corp. led U.S. carriers to their biggest drop in four weeks after JPMorgan Chase & Co. raised its estimate for the industry's 2008 operating loss by 57 percent to a record $7.2 billion.
Surging jet fuel will widen the deficit from an earlier projection of $4.6 billion, analysts Jamie Baker and Mark Streeter said in a report. US Airways Group Inc. and Northwest Airlines Corp. are the two big carriers most likely to seek bankruptcy protection, Baker and Streeter wrote.
Their prediction reflects the strain from the past year's 83 percent jump in jet fuel, the largest expense for most airlines.
Baker and Streeter projected that 2008 fuel spending will rise $17.5 billion, without giving a 2007 figure.
"At current fuel prices, legacy bankruptcies and/or merge- at-all-cost attempts are a question of when, not if, in our minds," the New York-based analysts said.
United is Denver International Airport's largest carrier.
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