Oil prices cause dip in air serviceby Multiple Authors on Jun. 30, 2008, under Edge, Local, Nation/World
Published airline schedules for October show about a third of the United States’ 100 busiest airports will lose at least 10 percent of their domestic air service compared with a year ago.
That will be only a foretaste of the broader and deeper cuts in the months to come if oil prices stay at record levels.
For example, the United States’ three largest carriers – American, United and Delta – have announced fall domestic capacity cuts in the 10 percent to 14 percent range, but only parts of those reductions will be in place by early October.
Those airlines and others have made it clear that more service cutbacks and job losses are ahead this year and in 2009.
Although smaller markets are seeing the biggest air service reductions in percentage terms, large airports in some popular business destinations also are scheduled for significant reductions, according to USA TODAY’s latest analysis of published schedule data from OAG-Official Airline Guide. The analysis is based on changes in total seats on daily domestic departures.
Among the airports losing 10 percent or more of their seats in October vs. a year ago: Cincinnati, a Delta hub; Houston’s Bush Intercontinental Airport, a Continental hub; Cleveland, another Continental hub; Pittsburgh; and Phoenix, a US Airways hub.
Even some megahubs will be hit hard by the cutbacks, though in percentage terms, the reductions don’t register as big.
American, for instance, plans to strip out 28 mainline flights at Chicago O’Hare in the fourth quarter. Its American Eagle affiliate will cut 34 flights there.
Vaughn Cordle, chief analyst at AirlineForecasts, says that average fares need to rise at least 20 percent if the airlines are to cover their higher costs. But higher fares will reduce demand, requiring about 15 percent to 20 percent less capacity, he says.
Other big carriers have yet to detail their service cuts, but have tipped their hands. United plans to park 100 jets by the end of 2009. It will lay off 950 pilots and cut the jobs of at least 1,100 other workers. More than 4,000 Delta workers have accepted incentives to retire early or leave voluntarily this year. Continental plans to cut 3,000 jobs this fall.
Southwest, the industry’s top discounter, is the only one still planning a modest year-over-year capacity increase.
By Dan Reed, Barbara Hansen