Login or signup
36

The Airlines Giveth and They Taketh Away
 

Advertisement

As a frequent traveler and as director of marketing for a travel technology company I am in a unique position to see the impact of trends that we forecast and monitor.

For months, the major U.S. airlines have been announcing they will start to reduce service. The reductions were needed to control costs, as the carriers were not able to run profitable routes as a result of the escalating fuel costs. Further, the airlines felt that they needed to increase revenue, and here the supply-and-demand principles went into effect.

The reality of the airlines' situation was, well, real. The economic conditions meant that routes that were marginally profitable one year ago were now money-losers for the airlines.

In our business roles, we took this guidance into consideration, and adjusted planning and forecasts accordingly.

Flash forward to today. I just landed in Tucson today, to make a presentation at an industry conference.

On the cab ride to the hotel, the driver commented on the fact that later this week, they will officially cut the ribbon on a new international wing for the airport. Today, the airport has one international flight.

On the same date of the ribbon-cutting, the airline will discontinue this international flight.

The situation goes further than that.

Starting this September, Tucson will be heavily hit by the reduction in flight services. The cab driver said that available seats will be 3 percent lower then they were in 2001. This means that all of the growth in available seats over the last seven years will be gone.

The impact goes way beyond the airline business. This means fewer passengers in cabs. Fewer heads in beds in hotels. Fewer diners dining in restaurants.

The effect on companies that have started or relocated to cities like Tucson is enormous. Drive time to Phoenix is 90 minutes. Not a good option for companies that will require frequent travel. A 90-minute drive to the airport may work for the family taking the once-a-year trip, but for a frequent traveler this creates a major inconvenience, not to mention the additional costs in fuel, lost productivity, and overall frustration.

Where commuter service to major hub cities exists this will mean fewer seats at higher costs — again not a good option for road warriors.

The cab driver went so far as to say that the lack of seats could eliminate the seasonal business from which the city benefits.

How will my fellow road warriors in these cities adapt to these new realities? Are we forced to accept the realities and deal with more connections?

Has anyone considered relocating back to hubs?

Last updated: Nov 6, 2008




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Comment and share features
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: