The Deepening Airline Depression

It's interesting...the benchmark for the toughest times financially for airlines is generally the months following the September 11th terrorist attacks. Then at the end of 2007 and into spring of 2008, airlines were dropping like flies because of sky-high oil prices. Long-standing airlines like Aloha Airlines were suddenly gone. Speculation grew as to whether this would become the worst period for air travel, financially since 9/11.

But many airlines responded by introducing new fees - checking that luggage would cost you; reserving over the phone would incur a fee; booking premium seats would mean forking over more money; you can have a pillow and blanket...if you pay for it; lots and lots of fuel surcharges; even a few of the no frills style airlines would charge to make a booking online. These fees seemed to reverse some of the losses incurred by blisteringly expensive jet fuel prices. Leading into the summer of 2008, the fuel prices plummeted and recovery looked pretty good.

Fast forward a few months and airlines started laying off employees left, right and center. Passenger traffic started dropping, the income-generating, premium business travel was especially hit hard (with a few airlines now removing some business/first class seats in favor of more economy ones); airline airfares dropped to historic lows in many cases; and routes were cut, slashed, and chopped.

With oil prices again on the rise, and airline employment levels now starting to drop below the post-9/11 ones, it seems that what I'd liken to a deep depression of the airline industry (the months after the September 11 terrorist attacks), may soon be exceeded by the global economic meltdown that continues now. More layoffs and route cutbacks are constantly being announced as the high season for air travel for many parts of the world is beginning. In my near 15 years with the airlines I've never witnessed anything like this. There are great airfare specials coming and going in rapid succession these days (and personally, if I was needing to travel to Europe or Asia in the next several months it really is prime time for incredible deals), I just wonder how long they can be sustained. And also, how long airlines can continue to operate this way?

A few of the recent articles from the past week regarding the seriously slumping airline industry...

• Airlines reduce size of spoons to save - one of the more unusual strategies to save money - lightening the load and saving fuel by eliminating spoons on flights where they wouldn't be required for meal service.
• Flight cutting - Delta, American
• American Airlines to cut 1,600 Jobs
• US Airways: Passenger revenue worse than post 9-11
• Japan Airlines Extends Unpaid Leave to September on Travel Slump - Singapore Airlines is just one of the other airlines in Asia that has also used leaves to reduce staff in the current economy.
• More to read and discuss in the Air Travel Forum

image from the Public Domain