Airline Cutbacks Mean No Service for Some Cities
ROBERT SMITH, Host:
Good morning, David.
DAVID FIELD: Good morning.
SMITH: So these American Airline cuts, how significant are they and how are they going to affect our pocketbook this summer?
FIELD: We don't know yet where the route cuts will be. But A) they will be there, and B) others are going to be doing the same and already are doing the same.
SMITH: Now, according to the laws of supply and demand, there's certainly the demand for travel in the summer months, why not simply increase the price of these flights and charge accordingly and get these planes back in the air?
FIELD: And remember, if you're American or Delta or Northwest, you're always on sale because of people like JetBlue, AirTran, and above all, people like Southwest. You can only raise your fares up to a certain point and then people book away or go away.
SMITH: Now, it's no secret that these big planes use a lot of fuel and that fuel costs were increasing. Wasn't there a way these airlines could take this into account and reduce the damage of high oil prices?
FIELD: In February, when I interviewed the president of Delta, he said we can make money at almost $100 a barrel. They can't make money at $150 a barrel. There is just no way to do it.
SMITH: So what long-term changes will we see to the industry? Are some of these names you've mentioned - these airlines - going to just disappear, won't be around in ten years?
FIELD: I think in 10 years you will certainly see A) fewer airlines and B) fewer big brand name airlines. I'm not going to name names, but someone will be gone. Someone will have merged. And between now and then you're going to see fewer flights, fewer seats, higher fares and a repeat of what we had last summer with congestion in the airports and delays on the tarmac.
SMITH: So how are we going to get to the beach this summer? Any advice?
FIELD: A lot of us aren't. Some of us are going to be buying DVDs of the beach and watching them at home. You're looking at a general contraction of the economy and a much more advanced contraction of the traveling economy.
SMITH: Thanks for joining us.
FIELD: Thank you.
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