Just some thoughts...most of the majors right now are blaming losses on gas price increases...or at least saying that's a good chunk of their losses. Well, this is the thought...OPEC is decreasing oil production and it doesn't look like relief is in sight. In fact, since America was paying a very low rate compared to the rest of the world, I think we're being cultured into accepting $1.75 as a national average as a darn good price. Well, since that kind of increase (what, about $.40 this year) affects the airline industry in a huge way...in other words, the millions or billions they budget for fuel was 25% under budget, and it's probably not going to change, and considering most of the majors are doing all the cost cutting they can do (of course, not DL
though), then somethings got to break or we're going to see America without a few of the majors is a short time.
You can't keep operating with millions in losses and expect to stay afloat. Airlines are in the business to make money, and right now most aren't doing it.
So what is the solution? 1) You could say survival of the fittest, but let's say a couple of the majors go under...Continental would probably survive, but so what...they would benefit from pax increase, but Continental is keeping a pretty high passenger load already and not making money as it is...so survival of the fittest doesn't really solve. 2) a merger? What would have happened if US and UA
had merged a few years ago...it would have been a nightmare--both would be out of luck. What if DL
merged right now--that wouldn't solve a darn thing...the pilots unions would just bicker about seniority and you'd just be compounding their respective problems...no solution there. 3) go low cost. Well, I think DL
will never do that because it would mean their pilots made tons less...I can't really say AA
pilots conceding that kind of money either, and it would take them each 10 years to get to a place with their lease and route agreements before they could even be consider LCC's. 4) some government help? Look at Amtrak--they haven't turned a profit once and I fear that given the economic conditions, most of the majors, even with govt. help would be the same kind of mind-blower that Amtrak is. Politicians are still trying to figure out why Amtrak can't make a dollar for Pete's sake.
So, think about it - what then is the future of the airline industry, because as is, only the LCC's and maybe Continental are surviving...and even Continental is still losing $$.