Airlines Reducing Capacities Means Higher Fares

The airline industry has been going through one of its most difficult times since 9/11.  The causes?  Take your pick; the global recession, rising fuel prices, and the pandemic swine flu have all taken a huge toll on the number of air travelers.  For instance, Delta has reported that the pandemic has already cost them as much as $125 to $150 million in revenue last quarter.

 To help them cope with some of the mounting financial pressures airlines have already started to charge more for incidentals such as food and drinks on their flights.  Some have even considered charging travelers for using the lavatory!  Airlines would like to raise their fares, but they cannot until they first reduce their carrying capacities by slashing routes or providing fewer seats by flying smaller planes.  Some airlines have already started to make their cuts.  This year American Airlines has already cut its capacity by 7.5% while Delta has cut its capacity by 10%.   Continental Airlines and U.S. Airways are expected to follow suit soon as well.  One thing you can be sure of that the next time you travel by air to New York City, Miami, Kansas City, wherever, it could cost you a lot more.

          How can you cope?  Well to start with you can shop around.  If you know the dates you’ll be traveling in the future book your flight as soon as you can before the rates go up.  You can also look at other alternatives such as taking a bus, train or driving yourself if the destination isn’t too far away.    

Businesses are already using some of the above measures and are looking into other alternatives to reduce their air travel budgets.  Fortunately, technology has done a lot to help them accomplish this goal.  One of the most popular technologies more and more businesses are starting to embrace is video teleconferencing.  Airlines may find that some of their revenue may not come back when the recession is over if businesses find more efficient, fiscally responsible means to operate.   

Unfortunately, it has been one of the hardest decades for the airline industry and it doesn’t look like it is going to get any better in the near future.

 

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  • 6/16/2009 10:22 AM Judy wrote:
    Fox News is reporting that British Airways has asked some its 40,000 staff to work without pay for up to a month as the ailing airline seeks to cut costs as they struggle with rising fuel costs and a loss of premium fare passengers.
    Reply to this
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