How Changes In The Airline Industry May Affect You

By Mike Grasso

The past few months have been turbulent ones for the airline industry. Put simply, the airlines are shrinking. We already lost Aloha, ATA, and SkyBus - among others. Remaining airlines are finding ways to "trim the fat" and find reasonable ways to limit costs/increase revenue while being hammered with record high oil prices. These changes will affect most passengers in some form.

Reuters has reported that more than 50 towns and small across the United States will reportedly loose airline service alltogether by 2009. Existing service to major cities, including right here in the Bay Area will be trimmed where necessary. Having a plane 80% full was the industry gold standard, now the bar has been raised. The airlines can no longer sustain flying planes 20% empty with the current cost of crude oil at all time highs. This means you can plan on flying fuller plans in the future. On average, that empty middle seat will now be filled with a warm body.

A method the airlines will use to ensure fuller flights is to limit the number of daily flights to particular cities. For example, City A to City B may have previously operated 6 daily flights, that may be cut down to 5. It may seem insignificant, but if the demand is the same, you can bet those 5 flights will operate near capacity, not to mention cost you more.

Fewer flights mean that during irregular operations, such as weather or mechanical cancellations, finding another flight to standby on will become more difficult. On the other hand, fewer flights may help already congested airports, such as Chicago's O'Hare, and get flights off the ground sooner.

You can also expect that your airline ticket price includes a seat and few other amenities.
American Airlines for example announced plans to charge $15 to check in your first bag. They also announced a $5 fee to book award travel on their website. U.S Air and United are now charging $150+ to make changes on non-refundable tickets. The cost of alcohol and food on some airlines is also climbing. Expect other fees in the future, and adjustments to existing ones.

Finally, frequent flyer miles. If you've been reading my blog for a while, you know I am an advocate for using your miles. The airlines will continue to find methods to devalue your frequent flyer account, or resort to options limiting the number of new miles you can accrue, such as a recent policy change by United & U.S Air eliminating the 500 mile minimum rule on short-haul flights.

Although it may not sound it, I am an ally of the airlines. They are under extreme pressure to change a business model that is simply not working in this high-price-of-fuel environment. They are making adjustments the best they can, and ultimately some of these decisions will impact all of us during future travels.