Airline Profits Grounded by Rising Fuel Prices and Bad Weather

After barely scraping through a two-year recession and a global financial meltdown, the airline industry's struggle to sustain a turnaround is now being threatened by rising fuel prices and nasty winter weather. Civil unrest in Egypt combined with surging demand have already boosted oil prices by 20% since last June, setting off alarm bells among the nation's carriers. Now, a series of winter storms that began in December has slashed airlines' revenues by tens of millions of dollars. Most carriers, other than AMR Corp. (NYSE: AMR ), made sizable profits for all of 2010, including records for some carriers. But expectations for 2011 are shrinking now that fuel prices have risen and a relentless series of winter storms have forced thousands of flight cancellations.