Airlines Reducing Service to Post-September 11 Levels
Thursday, October 1st, 2009
The weeks and months after the September 11 terror attacks in 2001 served as a ‘mini recession’ for many major airlines who were weakened by the decline in demand for domestic and international travel. It took some airlines several months and years to recover from the sharp drop in demand for travel, and many airlines experienced very light schedules over that period. Eight years later, analysts are finding that the fall in demand is very similar to the drop that airlines experienced after September 11, and the capacity cuts may get even worse in the oncoming months.
Many airlines are becoming depending on corporate travel to recover costs from the economic recession and if they begin to accommodate for more business travelers, this may leave leisure travelers with fewer flight options. Fewer seats in turn mean higher fares, even for economy class, and leisure or recreation travelers may not be prepared to pay higher prices with the consumer recession underway.
The Air Transport Association estimates that U.S. airlines will offer a total of 12.5 billion seat miles in the U.S. in the fourth quarter of 2009, which is not a lot more than the 12.1 billion seat miles that were available after the September 11 attacks. While some experts say that the economy is ‘bottoming out’ and will soon return to its regular levels, many airlines are still cutting more capacity in hopes of generating stronger interest from business and international travelers and recovering their lost revenue of the past year.
Still, low-fare airlines such as Southwest, JetBlue, and AirTran started to open up more routes and offered deep discounts on domestic travel in hopes of stimulating more sales. JetBlue and Southwest rolled out discount programs for business travelers, and are continuing to vamp up their offerings for their business travel market to maintain a healthy profit in the oncoming months.
