INTERVIEW-JetBlue CEO says airlines battle-tested

Wed Jan 28, 2009 9:59pm GMT



* JetBlue says oil spike prepared airlines for recession

* Airlines raised energy policy, air traffic with Obama

By John Crawley

WASHINGTON, Jan 28 (Reuters) - Battle-tested U.S. airlines are not flying high by any stretch but may be better positioned than other industries to fight recession, the chief executive of JetBlue Airways (JBLU.O) said on Wednesday.

Dave Barger, in an interview with Reuters after he participated in a White House meeting with other corporate executives, said big airlines were forced to restructure their operations or sink when fuel prices rose in 2007 and then spiked last year.

"Our industry has flown through the tsunami of oil," Barger said. "We made some difficult decisions a year ago but we're still subject to the landscape of a slowing economy and access to the credit markets."

Barger said airlines were "a long way" from being healthy but prospects are helped by lower fuel prices -- an ironic economic benefit of recession.

Executives, in their meeting with President Barack Obama, underscored key points about their industries and supported quick action on an economic stimulus package.

Barger described the discussions as open and wide ranging

-- a listening session rather than a meeting where answers were -- a listening session rather than a meeting where answers were expected.

"We each had our own themes," Barger said, noting that airlines offered a unique perspective on restructuring and recession.

He said airlines want the government to accelerate spending on air traffic control modernization and develop a cohesive energy strategy.

The airlines believe global speculators drove up fuel prices last year and called for tighter regulation.

Carriers were whipsawed by severe price swings. Prices topped out at $147 per barrel in July and analysts warned of potential bankruptcies if the trend was not reversed. Oil has since fallen to just over $40 per barrel.

Ray Neidl, an analyst with Calyon Securities, said carriers were prepared for recession months before others businesses but the outlook, while better than six months ago, is still uncertain.

"It's still a risky industry. They have to be very diligent about cutting costs and capacity. They still have revenue challenges," Neidl said.

Barger, whose company reports fourth-quarter and year-end results on Thursday, said Obama inspired confidence and executives stressed the need for corporate action to solve some of the nation's economic problems. "It's up to us to do a great part of it and not look for all of the solutions in Washington," Barger said.

None of the companies at Wednesday's meetings were from industries receiving federal bailouts -- like banks or auto companies.

(Editing by Tim Dobbyn)

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