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Where To Go Next for Tuesday, July 1

07-02-2008


Today's Travel News
Tuesday, July 1, 2008

Airline News Isn't Good

By Judi Janofsky & Rich Steck

With the price of fuel continuing to rise and mergers looking more and more efficient for airlines, industry news doesn't look good for either the consumer or the airlines.

Job Cuts
Last week, United announced it plans to lay off 950 pilots "as it prepares to cut domestic capacity to offset fuel prices." United follows steps taken by American Airlines last month when it said it would eliminate 1,000 jobs and in March by Delta which said it would cut 2,000 jobs through voluntary retirement this year.

Mergers
Delta and Northwest's planned merger seems to be moving onward even after the U.S. Justice Department requested more information on the deal. Delta says it would produce more than $1 billion in cost and revenue improvements with a merger. That's a pretty big incentive. Worried about further job cuts, Delta's pilot union last week backed the tentative Delta-Northwest pilot labor agreement, a major hurdle until now.

Pricing
To offset the increased price in fuel, airlines are reluctant to tack on additional fuel surcharges so they've turned to nickel-and-diming their passengers instead. First it was a fee for your second bag. Now at American and United there's a fee for your first bag. Which means more and more passengers are going to try to stuff bigger and bigger bags in the overhead bin, causing flights to be even more delayed than they now are. Other airlines are choosing other methods to increase revenue. Delta is charging for food and U.S. Airways just announced that passengers are going to have to cough up $2 for a soda. Both of these airlines clearly haven't thought these ideas through. Have they not noticed that every concourse in America now has a Burger King, Pizza Hut or McDonald's selling food and sodas for as little as $.99?

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