(Bloomberg) The Future of U.S. Air Travel: Fewer Flights and Higher Fares?

Posted by Kendall Harmon

"This is not your grandfather's airline business," says Ray Neidl, an aviation consultant for Nexa Capital and former American Airlines official, who notes that the lessening of cutthroat competition doesn't mean consumers won't see some benefit. For instance, the financial strength of the airlines will enable them to invest in new technology—including the latest fuel-efficient aircraft and a cutting-edge satellite navigation system to replace the country's aging radar-based air-traffic control. "It took us 35 years to get there, but it's almost a brand-new industry," Neidl says. Indeed, United says that the economic benefits of its merger with Continental allowed it to make much-needed upgrades, such as modernizing airport baggage systems and replacing its aging 757 fleet with new jets with better bin space and in-flight entertainment.

...the airlines' gain could be the passengers' loss, as carriers raise prices and rein in spending—often by slashing staff. While fares have, on average, remained relatively stable, fees for add-ons have soared and decreased competition has resulted in steep price hikes in several markets.

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Filed under: * Culture-WatchGlobalizationScience & TechnologyTravel* Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate Life

1 Comments
Posted July 15, 2013 at 5:45 am [Printer Friendly] [Print w/ comments]



1. Cennydd13 wrote:

I wouldn’t mind the fare increases if the airlines would include meals.

July 15, 9:33 pm | [comment link]
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