If you think rising gas prices are hitting you and your company hard at the pumps, imagine if your tank held 11,500 gallons and prices were skyrocketing.
This exact scenario has forced four airlines into bankruptcy in the last month, caused others to bump up baggage charges, and left the whole industry wondering what to do next. Throw in a massive FAA inspection of planes and you have an industry, and millions of traveler's plans, in serious turmoil.
Citing the rising cost of fuel, which jumped from $2.12 a gallon for the quarter ending December 31, 2006, to $3.39 a gallon as of April 9th, Denver based Frontier airlines filed for bankruptcy today. The airline vowed that it will continue to operate as normal, and is working with the courts to lock in fuel prices. ATA and Aloha air, which don't have as deep of pockets as Frontier, ceased operations on April 2nd and March 30th respectively due to fuel costs, and Champion Air, a Minnesota based charter service will lock its doors on May 31st.
American Airlines, the nation's largest carrier, canceled an additional 570 flights today due to FAA inspections of the wiring on all carrier's MD-80's, which brings the total number of cancellations for American alone to over 3,000 and the number of travelers affected into the hundreds of thousands. It will be interesting to see how American responds to these hard-hitting cancellations. CEO Gerard Arpey expects the costs to be "in the tens of millions of dollars." Add that to an estimated loss of $300 million for the first quarter and we may be seeing another name atop the list of bankruptcies, as well as some serious appeals to the government for bailouts.
If you're like me, you're not a big fan of the airlines. It seems they're out to screw you coming and going, and I'm pretty sure they have policies that mandate instant termination of any employee offering anything resembling customer service, but I love and need to travel, both for work and sanity. The more difficulties the airlines experience, the more hassles created for you and I and the more work traveling becomes. Not to mention the more money it costs.