U.S. air travelers may be wondering whether last week’s three airline shutdowns signal more trouble ahead. But a bigger concern this spring may be the likelihood of more delays, jammed planes and higher fares.
With rising fuel costs, fewer planes in the sky and heightened safety concerns with aging aircraft, travelers can expect flights to be more expensive, more crowded and later, giving passengers more reasons not to fly.
“It sure is a lot more expensive to fly these days,” said Barry Trupp, a farmer who lives outside of Denver and was flying back home from Los Angeles International Airport on Sunday. “I wonder if a lot more people will take driving vacations.”
If fewer people fly, struggling airlines may not be able to manage high fuel costs and decide to call it quits, after last week’s demise of Skybus, ATA and Aloha airlines, analysts said.
The three regional carriers had different reasons for ceasing operations, but all of them said high jet-fuel costs helped pushed them over the edge. ATA, for instance, abruptly grounded all its flights Thursday after it lost a major military contract for charter flights. Aloha cited “predatory pricing” from a new competitor, Mesa Air Group’s Go airline, for flights between the Hawaiian islands.
What airline will be the next to close?
“That’s the $64,000 question,” said George Hamlin, managing director for consulting firm ACA Associates.
Analysts said regional carriers ExpressJet, Frontier and recent startup Virgin America are considered somewhat vulnerable if fuel prices continue to hover at record levels.
Major carriers are also feeling the pinch. The Air Transport Association estimates U.S. airlines will spend an additional $14 billion on fuel this year, shattering a record set last year.
It just won’t fly
Three regional airlines that disappeared last week
ATA
Grounded its planes Thursday after losing a military contract for charter flights, a revenue stream that it said offset its increased fuel costs.
Aloha
After six decades of connecting the Hawaiian islands and the mainland, it faced stiff competition for interisland flights from Mesa Air Group’s Go airline.
Skybus
The no-frills carrier accumulated debts between $50 million and $100 million in only 10 months of operation, according to its bankruptcy filing.
