Wednesday, October 19, 2011

Airlines Battle Back to Profit

[ed.  Bad news flight fans, seating is getting tighter and those additional fees everyone loves to hate?  They're not going anywhere.]


by Jad Mouawad, NY Times

The same things making many air travelers grumble these days — rising fares with more and more fees, fewer flights, planes filled to the brim — are the things giving airline executives a reason to smile.

After a decade of losing money because of cutthroat competition, slumping traveler demand and volatile fuel prices, the industry has found a way to regain control of its fortunes — and make money — by shelving its 1990s strategy of aggressive growth. Despite the weak economy, most domestic airlines will have their second consecutive profitable year in 2011, after losing $55 billion since 2001.  (...)

In 1990, tickets accounted for 88 percent of the airlines’ passenger revenue. In 2010, that share dropped to 71 percent. The new revenue accounted for most of the difference. Bag fees alone brought in revenue of more than $784 million in the first quarter — out of total revenue for the industry of $43 billion.

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photo: Brian Kersey/Associated Press