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DECEMBER 2015 / JANUARY 2016 AviationPros.com 11 COVER STORY oil prices for 2016 will slightly rise from this year's $49.88 a barrel to $51.31. We would have to agree with the projection of these associations." So the oil industry is expecting per-bar- rel prices to rise, which is expected about as much as airlines trying to push proft projections down, except that rise is 2.9 percent in 2016. And that rate is projected through 2020. Obviously the percentages mentioned in this section aren't apples-to-apples. A4A is citing per-gallon prices for fnished fuel whereas Avfuel's numbers are per-barrel projections for crude oil. The comparison, however, reveals that fuel prices will not be jumping 37 percent anytime soon the way they have plummeted in the past year. "Barring unforeseen events – such as hurricanes, earthquakes, foods and other natural disasters, as well as political climates – we think it's very reasonable to say that while steadily increasing, overall, crude-oil prices will remain low, which customers should see refected in the end price of jet fuel products," Sincock says. The Air Necessities Maybe we've read too much into the pes- simism of the airlines' earnings reports. Perhaps they're just looking to push down expectations on Wall Street so they can wow the analysts again in the fourth quarter. After all, this is still an industry in recovery. "While the price of fuel has fallen year over year, fuel remains one of the airlines biggest and volatile expense," Hinton says. "This year is the frst year since the Great Recession that U.S. airlines' proftability has fallen in line with the average U.S. company," Hinton says. "This return to proftability has beneftted customers as airlines are strong, able to compete and reinvest in their business with new planes, products and destinations, including expanded service to small com- munities and internationally, which in turn creates jobs." Airlines for America says that, fnally, airlines are coming back into line with other business sectors around the country and fuel prices are a big part of that. Surely that's the case. But given the rate at which airlines are reinvesting in their operations, including GSE, it doesn't appear that the airlines' fuel- based proft projections are hindering them as a key indicator in aviation. If there's really anything to worry about for airline financials, it's that revenue remains pretty fat with an increase in the number of passengers carried. The fact remains, however, that expenses have fallen so far for airlines that they're able to provide fare decreases for customers and reinvest in employees and equipment. "While lower crude prices do translate to lower fuel costs, it stems from fat demand and increased supply, which tends to be an indicator of an economy that's slow to grow," Sincock says. The best conclusion to be drawn from what we know is that profts are going to remain high with oil prices rising just below 3 percent per year. Based on the rate that airlines have been putting that money back into operations and GSE purchasing, that's good news for the entire industry. Delta's third-quarter revenue was, in fact, down one percent compared to 2014 and, according to Jacobson, the company's fuel price fortune "will drive a $750 million beneft in the December quarter." Airlines across the country are warning that proft levels of this nature are currently unsustainable due to fuel price volatility . A4A estimated in 2014 that airlines were reinvesting $1 billion per month back into operations – including GSE and other equipment purchases. That number has only grown with a year of proftability.