Jeramey Jannene

An Insider Perspective On What’s Wrong In The Airline Industry

By - Aug 3rd, 2008 01:02 pm
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Milwaukeean’s are learning all too well that the airline industry is in trouble with Midwest Airlines recently cutting 1,200 members of its workforce and a eliminating a substantial number of routes.

Within days after the announcement by Midwest, other airlines were ready to move in and add flights.

Since Midwest announced its cuts Sunday, AirTran Airways has said it will add flights to Baltimore, Florida and Las Vegas. Northwest Airlines Corp. will add nonstop service to Los Angeles.

With the Midwest service cuts that take effect Sept. 8, and the flights being added this fall and winter by AirTran and Northwest, travelers from Mitchell will end up with eight fewer nonstop destinations: Hartford, Conn.; Louisville, Ky.; Muskegon, Mich.; Raleigh, N.C.; San Diego; San Francisco; Seattle; and Wausau/Stevens Point, via Central Wisconsin Airport in Mosinee.

Clearly not all of the routes were big money losers, but previously cheap fuel prices may have been the nail in the coffin for Midwest Airlines as they appeared to hang on to old, fuel-inefficient planes a little too long. Now they’re only going to fly with new planes, but they can’t make it non-stop to the West Coast from Milwaukee.

So how did the airline industry end up stuck with a massive number of old, less efficient planes flying regular service? According to an anonymous insider, it all goes back to the dot com boom (and bust).

Christopher Hayes, DC editor of The Nation, posted an insider’s perspective on his blog after he asked his source the question “Why does flying suck so hard?” The response confirms a lot of things you were probably guessing, and makes you consider a few factors you probably weren’t.

Actually, people have been asking me this question for the entirety of the ten years I have worked in this business. I think the best thing I can do is to basically give you the answer I gave ten years ago, and then take you through the ways in which that answer has changed (or, really, gained additional layers and nuance) as 1) the tech bubble burst, 2) 911 and aftermath 3) the current fuel crisis happened.

Read the rest of the response on Chris’s blog. It’s highly intelligent and takes into account a lot of economic principles that your standard news cast and newspaper articles skip over.

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2 thoughts on “An Insider Perspective On What’s Wrong In The Airline Industry”

  1. Tad Johnson says:

    The mystery to me is why the airlines refuse to raise ticket prices [enough to cover fuel costs]. I would gladly pay an increased fee if the airline could guarantee service (allowing for weather, naturally). Instead, most of the U.S. airlines are either going broke or running so lean that cancellations and delays are a given.

    Given this unfortunate set of circumstances, how unfortunate that we’ve opted out of building a modern passenger rail system. Maybe we should reconsider our options?

  2. Fredflyer says:

    It will be sad to see all those pilots and flight attendants loose their jobs…. how is the world are they going to make it…. no more boozing and sleeping around with each other… shout out to M. Klein… maybe try Starbucks ……… oh that’s right they are cutting back also… always retail or Alaska…

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