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Airline Industry Is Probably Hosed All The Way Through 2011

September 14, 2009 at 5:33 PM | by | Comments (2)

Summer has already been a bloodbath for the airline industry, and now new projections are showing a grim situation all the way through 2011. These figures are coming from Boeing and Airbus, two companies who agree on nothing except the very high probability that they're in trouble:

International air travel, whacked by the economic downturn, is starting to stabilize but may not recover until 2011 as companies and passengers continue to scale back.... Airlines have racked up massive losses since the global economic crisis led companies to curb travel and shipping and consumers cut back on trips. Carriers, their losses already $6 billion in first six months of the year, are set to lose a total of $9 billion for all of 2009, according to the International Air Transport Association.

Untangling what's going on with revenues is a little tricky, because in addition to everything else, lots of passengers are downgrading to coach. So without very precise numbers, it's tough to know whether the hits are coming from significantly less travel, different passenger choices, increased costs, or some combination of all three (hint: it's some combination of all three). In any case, things are not exactly looking up.

The airlines are hoping make up shortfalls by leaning on the baggage fees that have been swelling their bottom line. Because there's really no better way to convince people to start flying again then with opaque fees that leave a bad taste in everyone's mouths.

[Photo: Simon Schoeters / Wiki Commons]

Related Stories:
· Global air travel may not recover until 2011 [AP]
· Airline News Coverage [Jaunted]
· Airlines Coverage [Jaunted]

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Cost for travelers?

I'm curious as to how this will affect the price of passenger tickets. If the airlines are doing this badly, they would probably need to charge more for tickets, but then even less people will fly. If tickets get really cheap, more people will probably travel, though the airlines won't make much money. Hopefully prices stay around the same as they currently are and the airlines can just balance it out with optional fees (I always travel with a carry-on so I don't mind a baggage fee!). Let's just hope they don't add a toilet fee like RyanAir has been contemplating....that is going a little too far. Emily @ Maiden Voyage
emstarbuck on September 15, 2009 at 12:48 AM #Permalink

Forever?

Can they actually think that this industry will last forever being run the way it is now? I certainly don't want any defiant children in the seat next to me on my next flight but sometimes you end up with rude passengers next to you that you don't know how to handle. The airline industry needs to make some changes or they are going to all be bankrupt.
stewart33 on November 3, 2010 at 2:52 PM #Permalink

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