Kevin Mitchell, Chairman of the Business Travel Coalition, weighs in on the problems facing the airline industry
Kevin Mitchell, Chairman of the Business Travel Coalition, weighs in on the problems facing the airline industry.
: Is the industry in crisis?
Mitchell: Last year [U.S] airlines carried 769 million passengers, and that's projected to increase to a billion by 2015. And we're already gridlocked. What happens when we hit 800 million or 900 million passengers? Throw in the overall financial situation of the industry and the fact that it doesn't look like we are going to go below $100 a barrel [for oil] anytime soon, and prices are going to go way up.
Also, when airlines recover from a downturn, they usually take advantage of the sweet spot in the cycle to repair their balance sheets. But they didn't have the opportunity in this cycle. A lot of airlines turned the corner only last year, so there was no time to make their balance sheets healthy.
AM: What are the implications of the recent failures of airlines such as Aloha, ATA, and Airbus?
Mitchell: Depending on the length and depth of this downturn or recession, there could be a failure [of one of the major U.S. airlines]. There's probably a good bet some of the majors will end up back in bankruptcy.
AM: What are airlines doing to address the service issues that continue to pose a problem for air travelers?
Mitchell: When the money is available, and there's a will on the part of the airlines, there has been progress. Kiosks, for example, save time.
Remember that the airline systems were designed 30 or 40 years ago for a totally different environment, and from a customer-service standpoint, they're antiquated. To fix it will take a lot of time and a lot of money.
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