U.S AIRLINES' FINAL DESTINATION: “NON-EXISTENCE”
February 23, 2018
As a kid growing up, my dad was responsible for igniting my passion for anything and all things commercial air travel. Some of my best memories I have was when he would take my older brother and I to the airport to plane spot. Up until I moved to California to study journalism, I would spend much of my down time “flying” on my at home flight simulator and traveling around the country on a real planes which has allowed me to establish some sort of an expertise of knowledge of the air travel industry. To an ordinary person or traveler, they may think that the industry is not worthy of news or headlines. However, over the years looking at the industry closely, the aviation business creates headlines every day. Some of which are not reported or have had close attention to.
Competition in the market. It certainly has changed significantly over the years, but how has U.S air travel changed? This is an example of a topic in the nation’s economy that could be reported or focused on a bit more. If I were to ask you how many airlines that you could list off the top of your head, it would most likely be easier to answer than if I asked the same question 20 years ago. Listing some airlines off the top of my head that were flying 20 years ago include: ATA Airlines, AirTran, Midwest Airlines, America West Airlines, Continental Airlines, Northwest Airlines, and U.S Air. There are plenty more that I have not mentioned. However, the point of listing those is to show that all of those airlines now cease to exist and have been formed into other airlines.
Today, in the category of U.S domestic and international airlines, there are now “the big three” in the market which include Delta Air Lines, United Airlines, and American Airlines. About ten years ago, there were six airlines in the category. This has created a big difference in air travel compared to how it used to be. Travelers now have the choice between three different airlines to fly out of the country which has most certainly changed the way Americans travel. Why has this happened?
One of the major contributors to this problem is the cost of jet fuel. During the financial crisis from 2007 to 2008, airlines were slammed as prices of fuel went up. One of those airlines was American Airlines as they primarily operated jets that were anything but fuel efficient. This later caused the airline to go bankrupt. When airlines go bankrupt, it really is an opportunity for another airline to grow and become bigger and more successful. However, it means that there is on less airline in the industry. This exact scenario has resulted in the big three airlines as we know them today. In 2007, Atlanta based Delta Air Lines bought Minneapolis based Northwest Airlines, Chicago based United Airlines merged with Houston based Continental Airlines in 2010, and most recently, Phoenix based U.S Airways bought bankrupt, Fort Worth based American Airlines in 2013. Although this problem has been occurring in the domestic and international category, it is also happening in the low cost and domestic category that other airlines are in. Southwest Airlines bought AirTran a couple years ago, and just a few months ago, Alaska Airlines announced that it will be buying Virgin America.
What will the industry be like 20 years from now? Will there be no competition at all? Will we be facing a commercial aviation crisis?