As rising oil prices and sluggish demand continued to hammer the airline industry, Delta, American, and several other carriers forecast further cuts to service yesterday, reports the Wall Street Journal. Despite massive reductions in service, CEOs said at an industry meeting that they still aren't covering costs. "Earnings are going to be severely stressed until the economy changes," said Southwest's head honcho.
Leisure travelers will continue to fly during the high-demand summer season, but more lucrative business flyers are staying away. Another factor in declining airline revenues: swine flu, which took a toll on travel to and from Mexico and Asia. Continental estimated that the pandemic cost it $30 million in May, and Delta said the outbreak could knock $150 million off its second-quarter earnings.