Airline passengers are so fed up with the terrible service, intrusive security checks and high prices that they have stopped flying in record numbers. And the airlines, which were already having a terrible year, are preparing themselves for their worst summer ever.
Business and international travel, which had been a relative bright spot until then, dropped precipitously. Fuel costs have also been difficult to manage, as carriers first struggled to pay record high prices last summer and now have to contend with extraordinarily volatile prices. And the credit markets, which the airlines have turned to in previous tough times, are particularly reluctant to lend now, giving some carriers little choice but to pay high interest rates.
For the time being, analysts agree that the airlines, by cutting routes and employees, grounding planes and imposing fees, can weather the downturn. In fact, when the latest round of capacity cuts takes effect in September, the number of seats on domestic flights will drop to 66.5 million — the lowest September figure since 1984, according to OAG Aviation, which tracks flight schedules.
But if conditions continue to deteriorate, analysts say, some airlines may not survive.
"There are too many airlines and too much capacity and really no pricing power," said Hunter Keay, an airline analyst at Stifel Nicolaus in Baltimore. "This is as bad a crisis as the industry's ever seen."
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For travelers, this means that airlines will continue to cut flights in the fall — not by eliminating service outright as they did last year but by reducing the frequency and using smaller planes on certain routes. Passengers may also see new fees.
Translation: flying is about to get even more miserable than it is now.
