Airline Contraction Survival Tips

Image: Jason Hawkes/Getty Images

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Airlines are getting smaller—fast—and that is going to have a profound and immediate effect on how you travel.

After guessing wrong on the direction of oil prices and generally reducing their hedging positions this year, the big airlines now face a world where jet fuel costs twice as much as it did a year ago. The major U.S. carriers have announced they will shrink by around 10 percent in 2008, and they will attempt to stem the red ink by slashing at their route networks and flight schedules. The longer oil stays above $100 a barrel—doesn't that sound like a blast from a much happier energy past?—the more the airlines will cut.

That could mean some nasty surprises for travelers. Here's what you need to know to help you understand the new airscape and plan for the coming weeks and months.

What You Don't Know...

Some airlines have publicly trumpeted their cutbacks, all the better to underscore their parlous finances. But not everything is announced. Delta Air Lines, for example, is making sizable schedule reductions at its Atlanta, Salt Lake City, Los Angeles, and New York hubs. The carrier has been mum on details, however, because it wants to merge with Northwest Airlines and promised various government agencies that the combination wouldn't affect capacity. The lesson: Assume nothing. The flight you thought was there yesterday may not be on the schedule tomorrow.

Long and Short Are Most Vulnerable

You're at greatest risk of having a trip disrupted if it includes very long intercontinental flights or very short domestic commuter flights. The long hauls are going because they burn fuel simply to carry enough fuel to make the long runs. In fact, one European airline executive told me that his nonstop flights to the West Coast use about 30 percent more fuel per hour than his nonstops to the East Coast. So it's not surprising that Thai Airways is dropping its New York-Bangkok route (it stops at the end of the month) or Aer Lingus is cutting its Los Angeles-Dublin run (it ends in October). Meanwhile, the short commuter hops are going because the 37- and 50-seat regional jets aren't fuel-efficient either. It just doesn't make sense anymore to operate planes that carry so few passengers per flight.

Nonstops Are Being Stopped

Airlines are also eliminating routes that overfly their big hubs. One example: American Airlines has dropped most of its nonstop flights to Austin; most travelers now must connect through American's mega-complex in Dallas/Forth Worth. As airlines retreat, the larger hubs will fare better than the smaller ones. Last week, for example, Continental Airlines announced it would reduce flights at its Cleveland hub by 13 percent. The airline's much-larger connecting complex in Newark, New Jersey, however, is only losing 3 percent of its service. And the nation's most important hub, Chicago's O'Hare Airport, will see virtually no flight reductions. The federal government has capped the number of flights at O'Hare, and neither American nor United, the carriers that dominate the airport, want to risk losing any of their takeoff and landing slots.

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