As I opened the business page in this mornings paper with my steaming hot coffee I was greeted with this headline. “Airlines Cutting Seats And Raising Fares” Arrrrgh! When will the madness stop.
Corporate travel and ticket sales of premium seats are down. Overall demand is down and fuel prices are up again. Looks like the prices of fares this fall will rise and more planes will be tucked away.
Executives from Delta, Southwest, US Airways, Continental and American gave bleak outlooks at the investors conference in New York.
Why is this happening? The rise in unemployment and hits Americans have taken in the bank accounts is taking its toll and driving the slowdown in air travel. Also the swine flu hasnt helped matters.
All the airlines are planning large cuts in capacity. Unprofitable flights and offering incentives for employees to quit are a couple of quick fixes.
The airlines are also working the business traveler side very hard because that is an area that could recover quicker.
US Airways said the drop off in passenger revenue during this recession is even worse than the days after Sept 11.
I need a new cup of coffee….
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