This has a whole lot less to do with the price of jet fuel as it does an outdated and flawed business model, excessive labor cost, and absolutley embarrassing level of customer dis-service.
Funny how I don't hear Southwest squealing for their turn at the gubmint teat.
I love the phrase "embarrassing level of customer dis-service." But, that's not the biggest problem right now. Its a bad business model. I've never understood airlines as a business. They are highly leveraged, and there's no end to their capital expenditures. If they didn't exist, it would have been necessary for Boeing to invent them.
With respect to fuel costs, however, there's a slightly different explanation, which comes from the insurance business (among others--farmers do it too in the commodities markets). In the insurance business, you time-match the duration of assets and liabilities. So, if you are selling tickets forward, you should be hedging fuel to the mean duration of the tickets you've hedged forward.
The problem with hedging is that there is a cost involved--no one wants to be the first with more expensive tickets. There's no obvious benefit to the traveler (except that your airline will be there when you need to travel), since he doesn't usually factor in the bankruptcy of his carrier.
As for the dis-service, I agree its annoying and unnecessary. Remember when you met a better class of people traveling by air than by rail or Greyhound?