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.

American to eliminate Oakland flights

According to a spokesman from Oakland International Airport, American Airlines will be cancelling all flights from the airport beginning September 3rd. According to the spokesperson, eliminating Oakland flights is part of a larger plan to reduce the airlines domestic flying by 5 percent.

American Airlines represented only 1 percent of Oakland International's total aviation revenue. But, American's move to withdraw from Oakland follows on the heels of ATA, Aloha and Skybus Airlines who abruptly ended operations last month, affecting thousands of Oakland flyers.

American says it will accommodate affected passengers by using flights currently operated through San Francisco or San Jose Airports, where a broader network of American flights is available.

Some content obtained from the San Jose Mercury News

New Hawaiian Flight Starts Thursday

Hawaiian Airlines will start flying from Oakland to Honolulu International this Thursday. The 9am daily departure comes as a result of Aloha and ATA airlines having gone bankrupt and ending service between Oakland and Honolulu.

Passengers can make reservations for this flight at http://www.hawaiianairlines.com/

SkyBus Airlines Cancels Flights, Calls it Quits

Does this sound familiar? Last week it was Aloha and ATA, this week Skybus. All three airlines abruptly shut down, leaving passengers across the country scrambling looking for alternate flights.

After less than a year of operations, including flights out of Oakland, Skybus Airlines announced a halt to all passenger operations effective April 5th. The airline, which prided itself on offering seats from $10 each way, simply could not stand in the face of record high oil prices, taking a toll on the entire airline industry.

450 Skybus employees have been laid off, and passengers with confirmed reservations are on their own to find flight alternatives.

ATA Airlines Files for Bankruptcy, Cancels All Flights

Breaking News
Second airline this week to cease operations
Low-fare carrier ATA Airlines said it has filed for Bankruptcy Court protection and ordered the grounding all flights as it halted operations. The last scheduled flight landing early this morning. Nearly all of the airline's 2,230 employees were let go. Meanwhile, thousands of passengers were stranded at Oakland, Los Angeles, Chicago-Midway, and other airports across the U.S.

Earlier this week, citing chronic financial problems, Aloha Airlines announced the immediate end to all passenger flights. This left passengers scrambling to find new flights.

ATA airlines, which operated several daily flights from the mainland U.S to Hawai'i, blames the loss of a key military charter contract. In addition to scheduled airline service, ATA also provided charter service for the Pentagon.

ATA said passengers should seek alternative travel arrangements on their own. This morning Northwest Airlines announced that for a $100 fee, passengers confirmed on an ATA flight can standby for a flight on their airline. Southwest Airlines, which codeshared flights with ATA said they too will assist affected ATA customers.

ATA Airlines Shrinks Airline, Drops Oakland - Chicago

Citing high fuel costs, discount-carrier ATA says it will slash flights out of Chicago Midway (MDW) Airport over the next couple months, including dropping Oakland - Chicago service effective April 14th. ATA once dominated Midway Airport, but since emerging from Bankruptcy a couple years back, cutting routes and expanding code share service with Southwest Airlines, less ATA can be found at MDW.

ATA says its scheduled service to Hawai'i and other Charter flights are not affected by the announcement.Passengers who have purchased tickets on the Oakland-Midway route for travel after April 14th will receive a full refund.

New Routes and Added Service.

San Jose Airport NONSTOP to:
Los Angeles Delta (Express Jet) July 1st
Chicago (midway) Southwest May 13th

San Francisco Airport NONSTOP to:

Chicago (Midway) Southwest August 2007
San Diego Southwest August 2007
Las Vegas Southwest August 2007
Salt Lake City Jet Blue July 27th
Columbus, Ohio SkyBus June 12th

Oakland Airport NONSTOP to:

Kona, Hawai'i ATA June 14th
Lihue, Hawai'i ATA June 15th
Honolulu, Hawai'i ATA June 15th
Denver Southwest June 17th

Sacramento Airport NONSTOP to:

Vancouver, BC Air Canada June 15th