Shrinking Airlines Mean Higher Fares, Fewer Routes

[marmar]

Reuters, via Airwise.com:



June 9, 2008


By the time US airlines are finished cutting capacity and shrinking to survive record fuel costs, the US commercial airline network will look a lot leaner and, for some consumers, a lot meaner.

That is because fares, especially on less crowded routes, are rising fast, and some flights may just disappear.

Analysts say that for the airlines, the new pricing power is long overdue -- and consumers will just have to accept that cheaper air fares have disappeared for now.

"The days of affordable flying are over for now, and leisure travel could become a luxury," said Vicki Bryan, a bond analyst at Gimme Credit.

In a note to clients, Bryan said routes to as many as 30 cities across the country have been cut, citing statistics from the Bureau of Transportation.

United Airlines parent UAL said last week it will cut its work force and domestic fleet, following similar cuts by rivals as the industry grapples with a weakening economy and oil prices that have doubled in the past year.

Over this year and next, United will reduce its mainline domestic capacity at least 17 percent.

United's downsizing is consistent with recent steps taken by rivals.

American Airlines has said it will cut domestic capacity by 11 percent or 12 percent in the fourth quarter and eliminate more than 1,000 jobs.

Delta Air Lines, which plans to merge with Northwest Airlines, has said it will cut 2,000 jobs through voluntary retirement and reduce domestic capacity by 10 percent this year. .....(more)

The complete piece is at: http://news.airwise.com/story/view/1213037553.html

[Skink]

1. Remember the days of flying with empty seats around

I flew across country once with the back three rows to myself. That was a sight seeing trip.

[hendo]

2. Taking inflation into account, ticket prices were actually lower

than they were 10 years ago. Prior to this, that is. Maybe it is about time that they increase ticket prices. Then again, this will not bring with it an increase in service.

[Igel]

3. Still not *that* high, for a lot of routes.

I'm pricing tickets for my wife; she wants to go from Houston to Phoenix.

I decided to listen to all the news folk saying how prohibitively expensive it is to fly, so I priced train travel.

29 hours. Nearly $600--for a seat, no food or beverage. And you disembark in Maricopa, not one of the major cities with well-interlocking public transportation (Tempe, Mesa, Phoenix).

Fly--save $200 and 23 hours.