Another Airline’s Profit Crashes and Burns, and Your City May Pay the Price

Another day, another bad financial report on an airline. You could be forgiven for flying past the New York Times’ posting of Continental’s reported loss today.

The problem is that by overlooking this report you might miss the forest: Several airlines have stopped flying and even a scrubbing in bankruptcy seems to fail to halt the long-term tide of red ink for many “legacy carriers” (By the way, you’ll see that term a lot in airline stories, when you do just think: United, Delta, Northwest, American, Continental, and US Airways).

Fuel has become the lead weight around the planes that they can’t unload. That’s true and understandable, but we’ve often heard the argument that over their history airlines have always lost more than they’ve made. The mantra of the day is “too many airlines and too much capacity”, sooooo guess what? That’s right, airlines continue to shed employees, flights and capacity.

But that begs the question how many flights are truly necessary? Perhaps far fewer than airlines like to admit.

Here’s why you care: The decisions of the airlines affect much more than your next trip to mom and pop or your mean Aunt Tilly. Aside from airline jobs lost, whole industries are affected – hotels, restaurants, and even automobiles through rental cars. Remember, tourism has become a major driver of economics.

But there is more: A loss of easy access to airlines condemns many middle size and smaller cities to failure in their competition for jobs and industry. Transport is a major factor for urban centers to keep business and build new ones. The “hollowing out of America” is hastened when solid smaller cities lose airlines or pay outrageous fares to attract them. The result? Like much of the rest of the global economy, the spread between haves and have nots steam rolls on because only the wealthy cities can afford to keep bustling airports. So is technology somehow the savior? You’ll have to wait in the passenger lounge for the answer.