Saturday, April 5, 2008

Three airlines fold within 3 days of each other - a sign of the times?

It seems the U.S economic condition has worsened to the point that three airlines have decided to call it quits, right at the end of the second quarter, within the same 72 hour period. Now that's shocking.

Aloha Airlines was the first contender. This airline was in business for 61 YEARS. That's a long time. Bratty Mesa Airlines's GO! came onto the scene a couple of years ago, causing many headaches to "mom and pop" airlines like Aloha. They just couldn't keep up. One thing is for certain now - we probably won't be seeing $29 interisland fares anymore. While I doubt Hawaiian is going to fall anytime soon, they'll have to work hard to keep Go! from taking Aloha's share of business and keep their spot as Hawaii's most prominent airline.

Then, ATA called it quits. This Southwest Airlines partner was never a favorite of mine, and I can't say I didn't see this coming. While their fares were decently low, I only heard terrible things about the airline, and thus avoided it (much like I do with Southwest). With all the airlines heading over to Hawaii, I don't put my faith in the media's assertion that ATA's demise will raise Hawaii fares that drastically. Sure, it will be hard for fare wars to begin once there aren't as many players as before, but I never really considered ATA a major airline to Hawaii anyways (even if most of their schedules went there).

Then suddenly, right before midnight today, cheapie Skybus called it quits. I was excited at the prospect of $10 tickets when they served Bellingham, WA, but since they pulled out in January, I've largely ignored this airline. All flights were via Columbus, and to get anywhere else, you'd need to buy two tickets. This airline's main problem was serving small rural airports that were very inconvenient from the city's they supposedly served (ie. calling Portsmouth, New Hampshire "Boston", and Biloxi, Mississippi "New Orleans"). Not to say I wouldn't fly them for $10, but I wouldn't ever, ever pay their rack rates of $50 - $150 depending on route - sacrificing frequent flyer miles to save a few bucks is insulting.

So, what's the point of all this blather? These bankruptcies may be a sign of things to come.

As the U.S. economy worsens, with rising oil prices and high American unemployment, airlines are beginning to suffer. Right now, I am glad to be an Albertan, as the economy here is hotter than ever and unemployment is almost zero, but I feel for my American neighbors, who seem to have traded places economically with Canada in recent years. The US economy's health affects the entire world, especially the airline industry. Let's hope the US does not enter any further into recession, or travelling will become increasingly difficult.

What comes next? Northwest Airlines just announced they are freezing employment (aka not hiring any new workers), will add a host of service charges for extra bags, and will cut many domestic routes this year. This is the airline I think will either fold very soon, or will merge with Delta Airlines. Be wary about hoarding NWA World perks Miles in your account, and hoarding miles for ANY airline, in general. Make haste to get your award tickets booked sooner rather than later. You NEVER KNOW what may come, even overnight, as we can see with these three airlines folding.

Be warned, and let's hope I'm just a pessimist.


Travis said...

SkyBus flew to Portsmouth, NH -- not Nashua.

David said...

Thanks - I couldn't remember exactly which city it was, but I knew it was around Nashua.

I didn't even know Portsmouth had an airport.