More turbulence ahead for airlines

John Dimsdale Sep 1, 2008
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More turbulence ahead for airlines

John Dimsdale Sep 1, 2008
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Scott Jagow: The airline industry usually hates to see Labor Day arrive. That’s when travel starts to drop off. This year, the fall looks especially frustrating for everybody — airlines, their employees, passengers. John Dimsdale explains.


John Dimsdale: Continental is about to drop service to 15 cities. Southwest will trim 200 daily flights. And by the end of the year there will be 36,000 fewer airline jobs.

Henry Harteveldt: It’s the incredible shrinking airline industry.

Forrester Research analyst Henry Harteveldt says nine airlines closed up shop this year, including Zoom Airlines just last week. Fuel costs have jumped 50 percent over the past year, while ticket prices are up only 6 to 8 percent, thanks to fierce competition. That’s left airlines scrambling to charge for all the extras like luggage, pillows, even snacks. Julius Maldutis with Aviation Dynamics expects the smaller industry to have fewer members, as well.

Julius Maldutis: The Delta-Northwest merger is simply put a done deal. We will see what happens in Continental Airlines’ relationship with United Airlines next year.

Maldutis expects this turbulence to last another 12 to 18 months.

In Washington, I’m John Dimsdale for Marketplace.

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