April 24, 2008 7:17PM

How Much Would You Pay?

By Cheryl Casone

We are all starting to ask that question, I know I am. I have a lot of little weekend trips planned this summer that involve our esteemed airline industry. Right now if I go home to Dallas or Phoenix, it’s about 300 dollars, give or take 50. Sounds right? I am starting to wonder what those tickets are going to become when more airlines begin to merge or go out of business. And yes, that is coming quickly.

For me, it’s hard to believe that the industry has come to this. For you guys that know me well, you know I worked for SWA right out of college. It was a great experience, but I know from my friends on both sides of the industry, former colleagues and friends in television, everything has gotten worse, and if something doesn’t happen soon, we will go down to 3 airlines. Yes, just 3.

It isn’t just oil prices that have gotten us here, it’s also the increased security and financial pressure that followed September 11th. Think of the cost expenditure that goes along with training, equipment, and implementation of the new measures. (we need them, I’m not saying we don’t). There are union issues, in particular the powerful pilots, and then the straw that seems to have broken the camel’s back, sky high oil prices. And, yes, pun intended.

Should you invest in airline stocks? Not my call, but I think there are plenty of other good investments. I’d rather own a railroad or a shipping line right now than an airline.

As a consumer, I am trying to figure out what that 300 dollar ticket is going to be now. 400, 500 dollars? I think it’s possible. I think if we do end up with three airlines, Washington gets involved with fuel prices (they already are actually) and when crude comes back to reality, a new crop of airlines will come up. One caveat, Delta CEO Doug Steenland mentioned discount carriers that are eating into their business? That would not be on my excuse list if I were him with a microphone in front of me and a television camera to my right.

Don’t blame the competition if you survive, there is no sympathy in that.

3 Responses to “How Much Would You Pay?”

Comment by DRB

April 25th, 2008 at 9:50 pm

Discount airlines are biting Delta/NW in the butts. They do it better, they do it cheaper, they do it with a smile, great service and newer planes!

Delata CEO is Richard Anderson - NW CEO is Steenland.

Keep in mind that a few short years ago Anderson was the CEO of NW too. He griped about fuel prices then too. He had a ‘job’ at UHG in MN too and he joked that in the insurance industry he couldn’t blame problems on the price of fuel like he did in the airline industry. Good old Richard Anderson always blaming somebody other than himself for his airline’s problems.

Don’t believe him now either!
Comment by Hank

April 26th, 2008 at 1:32 am

I work for a large Airline,don’t be surprised if that ticket you bought this year,will be double by next year.The fuel these airlines are using was purchased 2 years ago,and for some airline’s last year.When they purchase fuel for next 2 years that priced payed will be even higher.Some airlines not many are on fuel purchased at 75-81 dallors a barrel.
Comment by joey45

April 26th, 2008 at 8:05 am

While I agree with most of your sentiments, the question might be framed differently. We all have to work, so I guess I’d have to pay it when necessary…and we all have to go to the grocery store, and occasionally, the doctor’s office.

I guess what I’m saying is, as you allude to in your comments, “How OFTEN will you be willing to pay that price?” Aye…there’s the rub, eh?

And while we’re on the subject: Forget using corn to make ethanol…it’s not cost-effective. When will we get those hydrogen, fuel cell, and electric cars at some cost level we could afford? Answer: Only when it is forced upon the industry, the market, the government, …and, oh yes, the public! Perhaps when the price of gas has made travel more probibitive, we’d be forced to consider some options that have been “off the table” for many of us.

Maybe, we’d have to consider living closer to our roots–our families and old friends (oh perish the thought!). Maybe those jobs which require the long, gas-eating commute, won’t seem as attractive. Perhaps we might be forced to find our life-satisfaction in simpler pleasures.

Well…How bad could that be?

joey45