Saturday, June 28, 2008

Flying to Extremes

With the tremendous runup in the cost of aviation fuel that now means that airlines are spending more for fuel than any other item, the airlines are looking to cut costs in every way imaginable.

They have cut amenities on board planes, limited how planes idle on taxiways, imposed fuel surcharges, raised fares, retired older planes, and now are cutting routes.
Across the United States, airports from La Guardia in New York to Oakland in California will be affected by flight cuts, bringing the industry down to a size last seen in 2002, when travel fell sharply after the 9/11 attacks.

Over all, the cuts will reduce flights this year by American carriers by almost 10 percent, industry analysts estimate, with even deeper cuts in store for 2009.

And if oil prices keep rising, airlines may have to keep paring their schedules, as they struggle to find ways to make money in light of rapidly rising jet fuel prices, which have climbed more than 80 percent in the last year.

This week, the country’s two biggest airlines, American and United, announced plans to lop cities like Fort Lauderdale, Fla., and San Luis Obispo, Calif., out of their networks. Cuts also are taking place on international routes to cities like London and Buenos Aires, and even to popular vacation destinations in the United States like Las Vegas, Honolulu and Orlando.

With more reductions coming next year, all the domestic industry’s growth over the last decade will most likely be lost. “The U.S. industry is undertaking a historic restructuring,” Gary Chase, an industry analyst with Lehman Brothers, wrote in a research report Friday.
While it means fewer flights, it also means that the issue of flight delays takes a back seat. Fewer planes vying for takeoff slots means that the planes scheduled to fly will now be more likely to make it to their destinations on time.

It also means fewer flights to secondary and tertiary markets, which means airports like Albany International or Stewart International will have a harder time attracting flights. We'll see plenty of stories in coming weeks about how those cities are coping with the loss of airline service, but the corollary stories of flight delays will take the back burner.

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