Expect to pay more for less as 'cheap and plentiful' era ends
New York Times Jun 6, 08 8:40 AM CDT
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In the 30 years since Congress deregulated airline travel, the country's major carriers have operated on a bigger-is-better strategy: fly more planes to more routes and you'll come out on top. But with fuel twice as expensive as a year ago, airlines are not just raising prices, they're radically changing their business models. Less is more is the new philosophy, writes the New York Times . “Air travel will be less democratic from here on out,” said one travel expert.
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Carrier is the latest to scale back operations citing fuel costs
Wall Street Journal Jun 5, 08 7:41 AM CDT
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Continental Airlines today became the latest US carrier to slash its workforce and trim flights in the face of profit-busting fuel costs and an industry-wide slowdown, the Wall Street Journal reports today. The airline will cut its workforce by 3,000 jobs, scale back US departures by 16%, and aggressively trim its fleet of fuel-guzzling 737s. United and American also recently announced cutbacks.
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70-jet reduction will cut capacity, result in large layoffs
Wall Street Journal Jun 4, 08 8:14 AM CDT
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United Airlines will ground another 70 fuel-guzzling jetliners this year—on top of the 30 announced earlier—as it struggles to get a handle on rising fuel costs and slowing growth in air travel, reports the Wall Street Journal. The move will lead to a major reduction in routes and frequency of flights, helping it to fill a larger percentage of its planes. The company will also cut 1,400-1,600 jobs on top of the 500 released earlier.
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Airlines already well under capacity as passenger numbers fall
Wall Street Journal Jun 2, 08 8:32 AM CDT
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Airlines battling rising fuel costs and weakening demand have become unexpected beneficiaries of production delays on the Boeing 787 Dreamliner and Airbus A380 jumbo jets, reports the Wall Street Journal . "For the industry, it's great,” says the chair of Air Canada’s parent company, "because it means less capacity." The carrier has 37 Dreamliners on order.
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CEO says UAL 'very close' to Continental merger
Wall Street Journal May 30, 08 7:15 AM CDT
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A proposed merger between United Airlines and US Airways is on hold again, the Wall Street Journal reports. United’s CEO told his US Airways counterpart that his airline is close to a deal with Continental, a merger that would be less costly and wouldn’t face as much antitrust scrutiny as a United-US Airways deal, the Journal notes. United’s revelation follows rejection from Continental last month.
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OPINION
Or face more delays, lost baggage, and longer security lines
Portfolio May 29, 08 6:28 AM CDT
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American Airlines’ plan to charge passengers $15 to check a bag is likely to cost the carrier more money than it generates, Joe Brancatelli argues in Portfolio . “Not only will it infuriate flyers—who are already annoyed with American’s lousy operating efficiency and its recent maintenance snafus—it’s likely to further erode American’s on-time and baggage-handling rates,” he writes.
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Top executives of the airlines plan face-to-face meeting tomorrow
Wall Street Journal May 28, 08 7:42 PM CDT
(Newser)
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The CEOs from United Airlines and US Airways will meet tomorrow to try to nudge ahead talks of a possible merger, the Wall Street Journal reports. If they make headway, the executives could present a possible deal to their respective boards in mid-June. The deal, in the works for two months but rumored to be in trouble recently, could easily fall through for a host of reasons, including the volatility of the industry over surging oil prices.
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United raises prices by up to $60; American, Delta follow its lead
Associated Press May 24, 08 11:05 AM CDT
(Newser)
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The big three US airlines responded to soaring oil prices by boosting most domestic prices by up to $60 roundtrip in the last few days, the AP reports. United led the way with increases from $10 to $60 Thursday; American and Delta followed suit yesterday. Meanwhile, low-cost AirTran raised its leisure tickets $30 and business tickets $50.
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Analysts say current model won't work at $130 a barrel
Dallas Morning News May 23, 08 10:40 AM CDT
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The airline industry as we know it can’t function on $130-a-barrel oil, industry analysts are saying, and cost-cutting, ticket price increases, and bag-check fees won't make it viable. The Dallas Morning News looks at how hopeless it is for airlines to come anywhere near break-even at current costs, noting that an expert said last fall it couldn't be done at anything more than $80 a barrel.
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Airline industry 'not built to withstand oil prices at $125 a barrel,' CEO says
Wall Street Journal May 21, 08 11:01 AM CDT
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American Airlines is cutting flights, jobs, and carrying capacity in its effort to withstand skyrocketing oil prices, the company announced today—and it's adding a $15 fee for some customers' first checked bag. US capacity could fall 12% as up to 85 planes are retired, the Wall Street Journal reports. The announcement sent airline stocks plummeting.
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Industry braces for slow summer with 2M fewer travelers predicted
New York Times May 21, 08 9:17 AM CDT
(Newser)
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Soaring fuel prices have prompted airlines to cut service—sometimes completely—to some 400 cities nationwide as carriers look for ways to maximize load and cut costs, reports the New York Times . Airlines reduced flights in May by 22,900 from a year ago, a 3% decline, and discontinued service to 30 cities. Analysts say there’s more to come.
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Save money by packing wisely
NPR May 18, 08 5:14 PM CDT
(Newser)
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With airlines charging more for extra bags, the trick is to fly light. A packing guru offers these tips for stuffing it all in one bag, NPR reports: Make a no-frills list, and stick to it (see onebag.com for ideas). Don't let any space go unused (stuff things into shoes, for example).
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Mechanics grumble after airline stops inspections
Wall Street Journal May 16, 08 1:40 PM CDT
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The FAA is questioning American Airlines' new policy on lightning inspections, and its opener is: Why doesn’t American do them anymore? American recently forbade its mechanics from doing extensive lightning damage checks unless pilots suspected a strike, a move designed to reduce delays and cancellations. Big airlines are typically allowed to tweak safety standards, reports the Wall Street Journal.
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