Chapter 12, Problem 96.2C

To determine

(a)

For the airline industry fuel is very important element because airplane cannot fly without fuel. And cost of fuel is very important for the company. A plane like a Boeing 747 uses roughly 1 gallon of fuel (around 4 liters) consistently.

As far as genuine working costs the greatest variable is the fuel cost. This is straightforwardly identified with the cost of unrefined petroleum. To endeavor to smooth out vacillations in the cost of fuel most expansive aircrafts fuel support.

To discuss:

How would you deal when you expect the financial statements of major airlines to be affected by the fuel price increase and the actions that the airlines would take in response?