April 28, 2008
A Challenging few weeks for Airlines!
It has been a challenging few weeks in the airline industry – just a few weeks ago, we had the horrendous problems at London Heathrow’s new terminal 5, with British Airways canceling flights and losing an estimated 28,000 bags. (Although the airlines claim that bags are never lost, just delayed).
Several small US airlines have declared bankruptcy in recent weeks – Aloha Airlines, Frontier, Skybus and ATA. The reasons are basically rising fuel prices (oil hit a record high of $119.90 a barrel a few days ago) and falling ticket prices. ATA’s bankruptcy especially hit passengers hard – the airline literally suspended operations overnight, leaving thousands of passengers stranded in Hawaii.
American is still the only large US airline that hasn’t declared bankruptcy at one time or another, so they must be doing something right. However, AA had horrendous problems a couple of weeks ago when they were forced to ground most of their Super-80 aircraft due to a safety recall notice by the FAA. American canceled over 2,000 flights over several days, leaving thousands of passengers stranded.
And it didn’t come as a big surprise that two of the biggest US airlines, Northwest and Delta announced plans to merge. (Perhaps in an effort to avoid some of the above problems!) If approved, the new airline would be the largest in the US in terms of number of planes and passengers carried) One potential problem with the merger could be opposition from the pilot unions for both airlines, even though a merger wouldn’t necessarily need their approval.
And virtually all the major US airlines recently announced huge losses for the first quarter of 2008. United Airlines lost a staggering $537 million – and the other airlines didn’t do much better.
If only the airlines could use alternative fuel, as an increasing number of car manufacturers are doing...
Guest entry by Mancunian
Posted by James Trotta at April 28, 2008 12:15 AM | TrackBack