Future of Airlines Bleak As Fuel Prices Climb

by BMCWrites | June 13, 2008 at 10:22 am
383 views | 0 Recommendations | 7 comments

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Future of Airlines Bleak As Fuel Prices Climb

Future of Airlines Bleak As Fuel Prices Climb

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In the wake of ever-increasing fuel costs, the nation’s airline industry is receiving more and more attention. Today, however, that attention came in the form of grim news as two industry-focused groups warned that several large and small U.S. airlines will default on their obligations to creditors beginning at the end of 2008 and early 2009 if fuel prices remain at or above current levels.

The charts below (click to enlarge), along with other details about the crisis in the airline industry, were made public in the form of a joint news release issued by Airline Forecasts and the Business Travel Coalition.

One can view these dire predictions in two ways:

    * Liberal entitlement seekers will hold that the 535 members of the largely-dysfunctional Congress should act immediately to provide some manner of government subsidization to the under-performing airlines; and

    * Conservative, small-government types will sound something like marketplace Darwinians and tell government to stay out of the airlines’ business and let the marketplace rule.

I’ll side with the survival-of-the-fittest crowd and offer my congratulations. Unfortunately, I fully expect big-government nanny-state types will get their way and come up with a bailout plan for the airlines whose operations and bottom lines are starting to look more and more like the Aeroflot of yesteryear.

-- Bob McCarty Writes


alia_d
alia_d
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at 15:10 on June 22nd, 2009

BMCWrites, I think your story has potential but needs some improvement. I noticed that the exact same post is also on your blog. Duplicating content is against NowPublic Policy. If you would like to retain this post, please make use of the highlight tool to indicate it has been taken from another website. Please review our FAQ or check out our J-Tips for more help.

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0
René

Do we have to bail them out again? They keep building bigger and bigger planes that use more and more fuel. they probably use more fuel altogether than all the drivers on the ground. How many times have you flown in a big plan where many of the seats are empty?

0
René

How about some charts on how much fuel these airlines use?

0
BMCWrites

Rene,

Regarding a bailout:  I hope the government doesn't bail 'em out.  Let the marketplace rule.

As for fuel usage, it appears you're an anti-oil industry enviromentalist who buys into the whole "We gotta get off fossil fuels" kick.  If only Congress would stop listening to left-wingers and allow drilling for the abundant supplies we have available, we would all be better all -- and not paying $4-plus for gas at the pump.

0
René

BMC, consider me rather anti-monopoly-cabal. There are new discoveries and drilling and methods of extraction right here in USA. We do need to develop more and better alternatives. Why should oil monopolize our energy sources? Auto industry could have and should have kept on the track of better gas mileage for all vehicles, but chose to ally with the oil companies rather than consumers. Airplanes are exempt from guzzling? C'mon. Haven't you seen their exhaust trails taking off? Smelled an airport lately.

0
Jordan Yerman

The airlines are on corporate welfare as it is, yet still pursue a profit-seeking stance: if that's the way they want to play (i.e. charging extra for checking luggage whilst reducing legroom with each cabin redesign), then let them sink or swim on the strengths of these "innovations".

0
René

and now they wanna add fuel surcharges, again, and again. Whoo-Ahh!

0
BMCWrites

Jordan,

Get your facts straight before you paint all of the airlines with the same brush.

Take a look at the charts included with this post, and you'll see one airline -- Southwest -- that appears in the #1 spot on each chart.  In fact, it has been profitable every quarter for the past 15 years or so, and it's done it without taking a dime of so-called "corporate welfare."

Bob

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