Wednesday, March 26, 2008

Domestic airline capacity shrinking, international routes increasing

A New York Times article explains that, largely due to oil prices, airlines are cutting back on domestic routes and ramping up international routes.

International routes tend to fill up large planes that are relatively fuel-efficient, while domestic routes tend to be with small planes that are gas guzzlers.

Here's the meat of the article:

Last week, Edward H. Bastian, the president and chief financial officer of Delta Air Lines, gave an informative presentation at the JPMorgan Aviation and Transportation Conference in New York.

Mr. Bastian outlined Delta’s aggressive plan to expand internationally while shrinking domestically. Most other major airlines are doing the same. By the summer, he said, 41 percent of Delta’s available seats will be on international routes.

By the second half of this year, Delta’s domestic capacity will be “down a full 10 percent over where it was just last year,” he said. By this summer, international capacity will be 77 percent higher than it was in the summer of 2005, he added.

“A considerable amount” of Delta’s international growth is coming out of the domestic system, he said.

Delta will further reduce its domestic capacity by 5 percent by August, when the airline will have removed from its fleet (by sale, re-leasing or simply parking in storage) 15 to 20 larger aircraft and 20 to 25 smaller regional jets.

Regional jets, I do not need to remind many of you, provide most of the service at small and even some big airports.

Many airports could be facing sharp cutbacks in service, unless those cities happen to provide what Mr. Bastian called “better asset flights.” Those are flights whose passengers are headed to a hub in the United States to make an international connection.

“Domestic capacity is increasingly being pointed toward feeding international destinations,” he said.

So the future of air travel in the United States is cutbacks for domestic travel.

How are we going to meet the growing demand for domestic travel?

Trains.

Lots and lots of trains.

More daily frequencies to more places at faster speeds.

Or we'll have people drive, buy more oil, make Saudi Arabia even wealthier and spend even more time in congested highways.

I vote for trains.

What do you vote for?

3 Comments:

Blogger Christopher Parker said...

I vote for trains too . . . but there are other possibilities in the running besides driving alone:

- I predict a kind of upscale internet based hitch-hiking (ride-sharing). It's already starting to happen.
- Greyhound, just bought (last October) by First Group of Scotland (which, by the way, is the largest rail operator in Britain) is set to begin a new subsidiary (jointly with Peter Pan, which you may recall has also indicated interest in operating train service) - Bolt Bus will operate Washington-Philadelphia - New York - Boston. To begin with. They seem to be the "un-Greyhound": frequent, non-stop service, more space on-board (bigger seat pitch) and wi-fi. There is a quiet rise of these new intercity bus services (the biggest being Megabus, which is operated by Stagecoach, the half owner of Virgin trains and a number of other rail operations).
- Southwest (and JetBlue) which stand to profit from the big carriers retrenchment. Sure, they've got fuel costs too, but they've handled them. Plus their planes are full, so the fuel costs are more spread out.

9:02 PM  
Blogger adam brown said...

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6:39 AM  
Blogger Chase said...

The quality of passenger services at the present time is rather important. The company should necessarily operate across the whole country to be able to stay on the market. At www.pissedconsumer.com I found out that Amtrak is the National Railroad Passenger Corporation. The company operates passenger service on routes across the continental United States of America connecting hundreds of destinations in 48 states; routes to Vancouver, Toronto and Montreal. In addition to the passenger service, Amtrak expanded into freight transportation market and now operates a captive bus service. I think the company is worth trusting.

2:33 PM  

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