Airlines concerned as oil prices rise

Airlines concerned as oil prices rise

May 21, 2009 (United Press International) -- Recently rising oil prices do not make sense from a supply and demand point of view, two U.S. airline executives said.

Gerald Arpey, chief executive officer of American Airlines (NYSE:AMR) , told a news conference after the airline's annual shareholder meeting, he did not understand the price of oil jumping to nearly $150 a barrel last summer. 'And I can't imagine in a global recession the circumstances that would drive oil to those levels again,' he said.

Southwest Airline's CEO Gary Kelly reiterated a complaint heard often a year ago. With oil prices rising 25 percent in the last month, in spite of a 7.6 percent drop in demand compared to a year ago, Kelly said investors were 'looking to commodities as an inflation hedge,' USA Today reported Thursday.

Oil prices briefly peaked above $62 per barrel this week, the highest level since November.

Prices at the pump have also gone up, with the national average price gaining 30 cents per gallon compared to a month ago, AAA said.