Thursday, April 03, 2008

It Continues to be the Economy, Stupid

The airlines are clearly struggling. House members are trying to figure out how Southwest Airlines could have for so long violated safety rules and how the FAA, the agency responsible for oversight, could have missed these safety violations. Planes have been flying with cracked fusilages (one of which cracked open in the 1980's, sucking a flight attendant out of the plane to her death), inspectors being told to "hush up" missed inspections of fusilages and rudder systems...


Now ATA, like many other low cost airlines like Aloha which pulled up stakes, are shutting their doors. As fuel prices keep going up and discretionary travel is drying up, the smaller players are going to continue to disappear, either filing bankruptcy or being absorbed by other businesses. Even the bigger players are feeling the pinch, particularly with domestic flights (they make more money from international flights). Fewer flights, more crowding and higher fares. What an unholy mix.

Planes on the Chicago tarmac, by Frank Polich of Reuters

This from MSNBC on ATA's collapse:

ATA Airlines shut down operations and stranded thousands of travelers Thursday when an unexpected loss of key charter flights and soaring fuel costs forced the carrier into bankruptcy.

Once the nation’s 10th-largest air carrier, ATA entered bankruptcy for the second time in just over three years. The company had more than 2,200 employees, and “virtually all” were told that their jobs were gone, company spokesman Michael Freitag said.

Many passengers learned of the collapse at ticket counters, where advisories were posted in the handful of cities ATA still served. About 10,000 passengers flew ATA each day before operations were shut down, according to the airline.

Oh, and while I was tapping out this post, I read a report on NPR which extolled the failures of the newly revamped Heathrow Airport in London in doing the little things--say, like keeping track of baggage. Turns out they're having to send the mountain of misplaced luggage to Italy to be sorted and processed.