Fuel costs for U.S. airlines edged lower in May from the prior month and dropped sharply from a year earlier, according to the Department of Transportation.
But the benefits from the falling fuel prices have come as the airline industry struggles to lure back passengers who have sharply curtailed leisure and business travel amid the global recession.
Some airlines recently raised fares across parts of their domestic networks amid signs the travel market was stabilizing, but Southwest Airlines Co. (LUV) stepped in earlier this month and sparked a fare war when it offered one-way flights for as low as $30.
The Bureau of Transportation Statistics reported airlines spent $1.73 a gallon, down a penny from April and $3.23 a gallon in May 2008. The airlines spent $1.74 a gallon for domestic flights and $1.72 a gallon for international flights.
The BTS said last week that U.S. airlines’ on-time and baggage-handling performance improved again in May, with the 19 carriers reporting on-time performance at an overall rate of 80.5% of flights on time.