Hassett: Energy shocks from Iran war will affect airline profits for at least a quarter

From the article:

White House National Economic Council Director Kevin Hassett on Sunday said that energy shocks from the Iran war will affect airline profits for at least a quarter.

“Certainly, it’ll affect profits for the airlines for a quarter or so, but they’re very, very healthy right now,” Hassett said following Spirit Airlines’ decision to cease operations.

The budget airline cited an increase in jet fuel costs tied to the oil supply shock driven by the Strait of Hormuz’s closure as part of the reason behind its decision to cease operations. The company canceled thousands of scheduled flights for passengers last week without prior notice, leaving people to individually assess their rebooking options without Spirit’s support.

When asked whether other companies could also collapse due to the uptick in operating costs, Hassett said that Spirit shut down because it didn’t have a working business model.

“The other airlines are still operating. I just flew out here to discuss these matters at the Milken conference in L.A., you know, on United Airlines, and the other airlines are operating,” he told host Margaret Brennan.

“What they’ve done, because they have thought ahead way more than the management of Spirit, is hedge their jet fuel purchases and so on. So that energy, short-term energy shocks don’t have a big effect on their business,” he added.

They hedged their jet fuel purchases? United cut routes and increased prices but okay..