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KAI RYSSDAL: I’m getting on a plane for the East Coast in a couple of hours. The odds of me getting three seats across — even on the red-eye — and being able to stretch out and take a nap are just about zero. Passenger jets are flying 80 percent full. And it’s only going to get worse. The largest six airlines in this country say they’re going to cut capacity even more. Marketplace’s New York bureau chief Jill Barshay reports.
JILL BARSHAY: Back in the 70s airlines made money even when their planes were half full. Today each plane needs to be more than three-quarters full just to break even. Richard Gritta is a professor of economics and transportation at the University of Portland. He says airlines are being squeezed with higher oil costs.
Richard Gritta: Since the last, I’d say, three to four years you’ve had this tremendous run-up in the price of oil. And this has really crimped the economics of this industry.
Gritta says airlines think there’ll be an economic slowdown next year. They’re already acting on the presumption that fewer people will take to the skies.
Gritta: They’re cutting back capacity to maximize how full those planes fly and it’s a disaster from the public’s standpoint.
International flights won’t see many cuts. Richard Golaszewski is an airline industry consultant at GRA Incorporated. He says international flights will continue to generate plenty of cash for the airlines.
Back at home, travelers can expect to wait on line. There will be 4.4 percent fewer seats on domestic flights this January compared with a year ago.
Golaszewski says most airlines haven’t got much fat left to trim. He says they’ll start by taking our scheduling options away.
Richard Golaszewski: If you’re in a market where you have 10 flights a day, you might go to nine. That’s a pretty easy and pretty flexible way to cut back. You know, that’s usually the first choice is try to maintain your presence in cities. If you have to, shift it to a regional partner.
Golaszewski says airlines will probably phase out many discount fares too.
In New York, I’m Jill Barshay for Marketplace.
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