US airlines post unexpected profits.
Three of the United States’ largest air carriers reported substantially higher than expected profits on Wednesday, helping to sustain a triple-digit gain on the New York stock market, Stunning analysts and brokers, U.S. Airways group battled back from an $80 million loss to post earnings of $240 million. The third quarter goes into the books as the most profitable in U.S. Airways history. Delta and American Airlines posted similarly impressive numbers, and market-watchers predict that all the members of the airline segment will post handsome profits by the end of the week. If their forecasts are correct, wing-watchers will celebrate the first time in over three years that the whole group has been in the black.
Pundits attribute the airlines’ soaring profits to baggage fees, flights booked and packed to capacity, and fees for reservations services. Despite steadily rising demand, the airlines have not restored more planes to service, electing instead to fill existing flights.
Executives deaf to flyers’ complaints.
The U.S. Department of Transportation reports passenger complaints have increased more than 35% in the last year, but airline officials maintain the vast majority of complaints come from a miniscule fraction of air travelers. They also point to statistics that show improvements in key airline service areas. “Bumping” fell 25% during the spring and summer travel seasons, and the rate of lost luggage fell 15% during the same period. “Airline executives have been, and will continue to be, tone deaf to the increasing customer dissatisfaction with the airline industry,” Brandon Macsata, executive director of the Assn. of Airline Passenger Rights, told the Los Angeles Times.
Pent-up demand versus frequent flyer fatigue
Industry analysts predict much heavier-than-average holiday travel because recession-ravaged families have postponed trips to grandma’s house for the last several years. Early season reservations support their forecasts, and with the average fee for changes hovering at around $300, few passengers will feel inclined to change their minds. Yet many weary business travelers agree with Mary Cardas, a Southern California entrepreneur, who concludes, “Waiting areas are loud and overcrowded and security is unpleasant. Add to that the natural weather delays that are inevitable between here and where my family lives… Quite frankly, I’d rather stay home.”
