To say that the airline industry is going through some tough times would be one hell of an understatement. With various airlines reporting their second quarter earnings today, while others implemented new fees and cut service, I thought it would be helpful to get you up to date with what is going on with some of your favorite (or least favorite) airlines.
With fewer people flying these days due to the poor economy and analyst predicting an extremely weak fall travel season, airlines are preparing for the worst. When airlines do bad, three things usually happen – new fees, service cuts and layoffs.
- Continental Airlines: The fourth-largest U.S. carrier, reported a $213 million second-quarter loss and will wind up cutting 1,700 more jobs and increase some fees due to a decrease in customer demand.
- Southwest Airlines: The largest low-fare carrier, reported a $53 million second-quarter earning, which is way down from last year’s $321 million. Southwest had an 83 percent drop in second-quarter profit and stated that 1,400 workers have accepted a buyout to leave the company.
- United Airlines: The Chicago based airline announced earnings of $28 million. That was largely due to fuel hedge gains and various other smart moves made by the carrier. However, the airline will cut international travel by an extra 7 percent for the last four months of 2009.
- Delta: The Atlanta based airline announced it will start charging a $5 surcharge for bags checked at the airport. This will go into effect August 4 and applies to tickets purchased after July 15. Delta currently charges $15 for the first bag checked and $25 for the second bag. So starting August 4 you will now shell out $20 and $30 respectively. Fees for bags checked online will remain the same according to Delta.
- Republic Airways: The little that could has shocked many airline insiders with acquisition of Frontier Airlines for $108.8 million(pending a federal bankruptcy judge’s approval). It was just last month that Republic bought Milwaukee-based Midwest Airlines. (Courtesy of USA Today)
- All of the bad airlines news is not just happening in the United States. Just a few days ago many numerous carriers raised fuel surcharges. Lufthansa, Thai Airways, India’s Jet Airways, and airlines in Taiwan cited higher costs, less than stellar revenue, and poor demand as the main reasons they needed to raise fees.
- RyanAir: The Dublin based low-cost carrier announced plans to cut back on 40 percent of its planes at Stansted airport in London. Of course the outspoken CEO of RyanAir Michael O’Leary is not blaming the recession on the drastic decision to chop 15 percent of its fleet this winter, but instead says it is the British Government and the take-off/landing fees that the BAA charges airlines. The cutbacks at Stansted come on the heels of the cheapo planes plans to freeze additional services at eight other UK airport bases. RyanAir even drastically slashed service at it’s home base of Dublin, as well as its other major Irish airport Shannon.
