The cost of fuel is reported to be about 20 percent of the total operating cost for a major airline. Events in the Middle East caused jet fuel costs to nearly double from 2006 to 2009.

Required:

1. If you were the CEO of a major airline, how would you suggest that the airline respond to the fuel price increase?

2. How would 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?