U.S. airlines lost a combined $1 billion in the first three months of this year. This is largely because of escalating fuel prices. Fuel costs are now the number one operating cost for airlines. To put that in perspective: ten years ago fuel represented 15% of an airlines operating budget, while salaries and benefits represented 39%. Today fuel costs represent 35% of their budget, and salaries and benefits represent 28%.
The airlines are hoping to offset the escalating cost of fuel in part by increasing the efficiency of flying their airplanes. They are making progress towards this goal, as discussed in this recent article from Yahoo! Finance.