Evergrey
06-28-2008, 03:48 PM
http://travel.nytimes.com/2008/06/28/business/28shrink.html
Travelers Facing Deep Flight Cuts by Summer’s End
http://graphics8.nytimes.com/images/2008/06/28/business/28shrink-span-600.jpg
Fabrizio Costantini for The New York Times
Eric J. Frankl, the director of the Toledo Express Airport, says the loss of some service “really hurts our ability to serve the business community.”
By MICHELINE MAYNARD
Published: June 28, 2008
With summer barely under way, it may seem too early for travelers to start thinking about Labor Day. But that is when significant cuts in the airlines’ fleets and schedules will begin taking effect, making for a particularly jarring end to summer.
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.
Air fares, which are up about 17 percent this year on average, may rise as much as 40 percent within the next four years, Mr. Chase predicted.
And airlines continue to add fees — Delta said Friday that because of high fuel costs, it will start charging up to $50 to book a frequent-flier awards ticket. American and US Airways also recently announced they would charge to book tickets using miles.
Leisure travel falls in September, so occasional fliers may first encounter the harsh new reality of flying at Thanksgiving, with fewer flights and less-convenient connections.
By year’s end, roughly 100 American communities will be left without regular commercial air service, and that number may double next year, according to the Air Transport Association, the industry trade group.
“The guy who is used to taking a nonstop flight on a small airplane now has to drive an hour to an hour and a half to an airport to take a trip,” said David Castelveter, a vice president with the trade group. “It is a crisis of great magnitude and it is having an impact already.”
At least one major carrier could liquidate, the trade group has warned, on top of eight small airlines that have disappeared or filed for bankruptcy protection this year.
The prospect of losing service alarms passengers and politicians alike. “I implore American Airlines, as well as the other carriers considering various cost-saving scenarios, to take into account more than profit when they evaluate routes,” Gov. David A. Paterson of New York said this week after American announced a series of cuts affecting La Guardia and other state airports.
Airlines know the changes are painful. Said John P. Tague, United’s chief operating officer: “There’s going to be a period of adjustment in the last half of the year that will be unpleasant.” But the downsizing of the airlines is unlikely to be reversed anytime soon. Carriers are selling off hundreds of older, less-efficient planes, so the industry would have trouble growing sharply again even if oil prices were to drop and the economy were to rebound quickly.
Well before jet fuel costs jumped, analysts were saying there were too many carriers and that a round of mergers was needed to consolidate the industry.
In effect, travelers are seeing the likely results of such mergers — reducing operations to save costs — with only one merger occurring, the combination of Delta and Northwest.
“It’s not for the faint of heart,” David Barger, chief executive of JetBlue, said of the current environment.
For the airlines, the steps are an effort to stave off losses this year that could be the worst in industry history, even greater than in 2002, when travel plummeted in the wake of the 2001 terrorist attacks.
The A.T.A. predicts the domestic airlines will collectively lose a minimum of $7 billion this year, and as much as $13 billion, which would eclipse the $11 billion the carriers lost during 2002.
For passengers like Allon Lefever of Harrisonburg, Va., the looming cuts threaten to make his trips even more cumbersome. Mr. Lefever prefers to fly Continental from Washington-Dulles airport to the Toledo Express airport, through Cleveland, for the board meetings he attends four times a year.
But this month, Continental announced it would drop service to Toledo, including the flight Mr. Lefever waited for on Wednesday afternoon.
“It’s disappointing to see another airline walking away from the Toledo airport,” Mr. Lefever said. It is also disappointing to airport officials, who try to persuade Toledo residents not to drive to larger airports in Detroit, Cleveland and Columbus.
They were hoping to attract more passengers when Continental, which used to serve the airport with 19-seat turbo-prop planes, began flying 37-seat aircraft there in February. “We haven’t had much time to really enjoy it,” said Eric J. Frankl, the airport’s director.
The loss of service “really hurts our ability to serve the business community,” Mr. Frankl said. “Most companies that are looking for a location want to have good, convenient access to the air transportation system.”
Mr. Castelveter of the Air Transport Association said the airlines regret having to prune a system that essentially promised Americans — and even international travelers — that they could fly to any corner of the country within a day.
“I don’t think any airline wants to say to any community, ‘We can’t serve you,’ but they’ve got no choice,” he said. “It’s now a matter of survival.”
Mr. Chase at Lehman Brothers said the airlines probably would save about $1 billion by replacing less-efficient planes with newer aircraft and eliminating money-losing routes.
That could help airlines recover lost profits, particularly if they charge more for fares, which he forecast will rise by at least an additional 8 percent this year, and as much as 40 percent higher in 2012 compared with 2007.
That is not much consolation to travelers like Ken Schulze, a farmer from McClure in northwestern Ohio.
Mr. Schulze and his wife, Val, fly three or four times a year, often to visit their son in Utah, and like to start out from Toledo. Otherwise, the Schulzes must drive a minimum of 90 minutes to a bigger airport, he said.
Echoing the wishes of travelers across the country, he added, “We would really like to see the airlines stay here.”
Nick Bunkley contributed reporting from Toledo, Ohio.
http://graphics8.nytimes.com/images/2008/06/28/business/0628-nat-sub-clr-SHRINK.jpg
Travelers Facing Deep Flight Cuts by Summer’s End
http://graphics8.nytimes.com/images/2008/06/28/business/28shrink-span-600.jpg
Fabrizio Costantini for The New York Times
Eric J. Frankl, the director of the Toledo Express Airport, says the loss of some service “really hurts our ability to serve the business community.”
By MICHELINE MAYNARD
Published: June 28, 2008
With summer barely under way, it may seem too early for travelers to start thinking about Labor Day. But that is when significant cuts in the airlines’ fleets and schedules will begin taking effect, making for a particularly jarring end to summer.
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.
Air fares, which are up about 17 percent this year on average, may rise as much as 40 percent within the next four years, Mr. Chase predicted.
And airlines continue to add fees — Delta said Friday that because of high fuel costs, it will start charging up to $50 to book a frequent-flier awards ticket. American and US Airways also recently announced they would charge to book tickets using miles.
Leisure travel falls in September, so occasional fliers may first encounter the harsh new reality of flying at Thanksgiving, with fewer flights and less-convenient connections.
By year’s end, roughly 100 American communities will be left without regular commercial air service, and that number may double next year, according to the Air Transport Association, the industry trade group.
“The guy who is used to taking a nonstop flight on a small airplane now has to drive an hour to an hour and a half to an airport to take a trip,” said David Castelveter, a vice president with the trade group. “It is a crisis of great magnitude and it is having an impact already.”
At least one major carrier could liquidate, the trade group has warned, on top of eight small airlines that have disappeared or filed for bankruptcy protection this year.
The prospect of losing service alarms passengers and politicians alike. “I implore American Airlines, as well as the other carriers considering various cost-saving scenarios, to take into account more than profit when they evaluate routes,” Gov. David A. Paterson of New York said this week after American announced a series of cuts affecting La Guardia and other state airports.
Airlines know the changes are painful. Said John P. Tague, United’s chief operating officer: “There’s going to be a period of adjustment in the last half of the year that will be unpleasant.” But the downsizing of the airlines is unlikely to be reversed anytime soon. Carriers are selling off hundreds of older, less-efficient planes, so the industry would have trouble growing sharply again even if oil prices were to drop and the economy were to rebound quickly.
Well before jet fuel costs jumped, analysts were saying there were too many carriers and that a round of mergers was needed to consolidate the industry.
In effect, travelers are seeing the likely results of such mergers — reducing operations to save costs — with only one merger occurring, the combination of Delta and Northwest.
“It’s not for the faint of heart,” David Barger, chief executive of JetBlue, said of the current environment.
For the airlines, the steps are an effort to stave off losses this year that could be the worst in industry history, even greater than in 2002, when travel plummeted in the wake of the 2001 terrorist attacks.
The A.T.A. predicts the domestic airlines will collectively lose a minimum of $7 billion this year, and as much as $13 billion, which would eclipse the $11 billion the carriers lost during 2002.
For passengers like Allon Lefever of Harrisonburg, Va., the looming cuts threaten to make his trips even more cumbersome. Mr. Lefever prefers to fly Continental from Washington-Dulles airport to the Toledo Express airport, through Cleveland, for the board meetings he attends four times a year.
But this month, Continental announced it would drop service to Toledo, including the flight Mr. Lefever waited for on Wednesday afternoon.
“It’s disappointing to see another airline walking away from the Toledo airport,” Mr. Lefever said. It is also disappointing to airport officials, who try to persuade Toledo residents not to drive to larger airports in Detroit, Cleveland and Columbus.
They were hoping to attract more passengers when Continental, which used to serve the airport with 19-seat turbo-prop planes, began flying 37-seat aircraft there in February. “We haven’t had much time to really enjoy it,” said Eric J. Frankl, the airport’s director.
The loss of service “really hurts our ability to serve the business community,” Mr. Frankl said. “Most companies that are looking for a location want to have good, convenient access to the air transportation system.”
Mr. Castelveter of the Air Transport Association said the airlines regret having to prune a system that essentially promised Americans — and even international travelers — that they could fly to any corner of the country within a day.
“I don’t think any airline wants to say to any community, ‘We can’t serve you,’ but they’ve got no choice,” he said. “It’s now a matter of survival.”
Mr. Chase at Lehman Brothers said the airlines probably would save about $1 billion by replacing less-efficient planes with newer aircraft and eliminating money-losing routes.
That could help airlines recover lost profits, particularly if they charge more for fares, which he forecast will rise by at least an additional 8 percent this year, and as much as 40 percent higher in 2012 compared with 2007.
That is not much consolation to travelers like Ken Schulze, a farmer from McClure in northwestern Ohio.
Mr. Schulze and his wife, Val, fly three or four times a year, often to visit their son in Utah, and like to start out from Toledo. Otherwise, the Schulzes must drive a minimum of 90 minutes to a bigger airport, he said.
Echoing the wishes of travelers across the country, he added, “We would really like to see the airlines stay here.”
Nick Bunkley contributed reporting from Toledo, Ohio.
http://graphics8.nytimes.com/images/2008/06/28/business/0628-nat-sub-clr-SHRINK.jpg
