In February, with oil prices hovering at just above $90 a barrel, JetBlue Airways announced plans to start four daily flights from the Northeast to Los Angeles. In a matter of weeks, crude prices shot up 30 percent, and in a quick reversal, JetBlue was forced to abandon its plans.

"It cost us $9,600 in fuel to fly from the L.A. area to the Northeast when we announced those flights. Two months later that went up to $15,000," says JetBlue spokesman Bryan Baldwin. "Those are huge cost increases."

The rise in energy prices has been unwelcome in many industries-automakers and retailers have reported softer sales as consumers spend more at the pump. But fuel accounts for a huge portion of airlines' cost structures. And the swiftness of the recent surge in oil prices left them particularly vulnerable as a result.

Through the 1990s, with oil prices at $20 per barrel, fuel expenses made up between 10 and 20 percent of airlines' operating costs. As of the first quarter, with oil prices at over $100 per barrel, most airlines reported fuel costs of between 30 and 40 percent of total expenses—exceeding the amount spent on labor.

So what can an industry projected to lose more than $7 billion this year—about the combined market capitalization of the six legacy carriers—do to survive?

"One of the puzzles of the industry is why haven't airlines been able to pass on higher costs to passengers," says Nancy Rose, an M.I.T. economist who has studied airlines.

While airlines have announced plans to cut unprofitable flights and increased or introduced ancillary charges, they have only recently begun to raise ticket prices.

Competition from low-cost carriers and bankruptcy protection for legacy airlines may be the culprit here, says Rose's colleague Peter Belobaba, who runs M.I.T.'s Global Airline Industry Program. Legacy carriers were able to compete with thriftier airlines in recent years thanks to bankruptcy protection, which helped Delta and others slim down and pare debts.

But this left the marketplace "terribly spoiled over the past five years by what are, by any measure, unreasonably low airfares," Belobaba says.