The Airline Crisis Deepens
Persistently high fuel prices are worsening the crisis facing US airlines. The New York Times reports carriers are going to slash 10% of their flights this fall:
With more reductions coming next year, all the domestic industry’s growth over the last decade will most likely be lost. “The U.S. industry is undertaking a historic restructuring,” Gary Chase, an industry analyst with Lehman Brothers, wrote in a research report Friday.
Air fares, which are up about 17 percent this year on average, may rise as much as 40 percent within the next four years, Mr. Chase predicted.
The NYT article focuses on smaller towns that are being cut out of the US air network, including San Luis Obispo. The article might make it sound like it’s just the small fish being hurt. But an LA Times article on the impact of $200/bbl oil, which we are fast approaching, notes that the LA-SF route is in for cuts:
Travelers can also expect much fuller and much more expensive airplanes — when flights are available at all. Delta Air Lines Inc., for example, recently said it was cutting about 13% of its flights from Los Angeles International Airport to save fuel.
It also could mean shifting flights from outlying airports such as Ontario to LAX to cut overhead costs, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. Carriers probably would also trim flights in highly competitive air corridors such as L.A. to the Bay Area.
Unfortunately the LA Times article totally neglects to mention high speed rail and Prop 1 as the solution to that crisis – but that is indeed the answer. The era of cheap oil is over for good, and it’s time we looked to long-term solutions that provide clean, sustainable transportation free from the vagaries of oil prices. High speed rail is necessary if Californians are going to get around their state, if our economy is going to have a shot at competing in the globalized 21st century.
We’re not the only ones seeing this. Southwest Airlines has stayed afloat this long only through the use of complex fuel hedges, which will expire within a few years. Recognizing the problem their CEO, Herb Kelleher, had this to say last month:
Herb Kelleher, the iconic co-founder of Southwest Airlines who stepped down as chairman Wednesday, said flying could become something that only business travelers or the affluent can afford, much as it was in the 1950s and ’60s.
“You may see a lot less air service across the United States, and that’s really a shame,” Kelleher said. “We are heading back in that direction.”
HSR is our only chance to provide affordable, frequent, high capacity intercity travel for California.