April 26th, 2008 by tommy

Oil at $120 a barrel, consumer discretionary spending weakness, consumer awareness on the effects of non essential carbon emission output… it all looks like a perfect storm for the airline industry. Despite already battered stock prices, could there be still more downside left in the market?  Will it take government bailout to save the beleaguered airline industry, or will market forces enact their natural forces towards correction towards a new balance point.  Certainly if the latter occurs, we will witness the death of more airlines, following the macabre path of Aloha, Frontier, and other airlines that have gone down in 2008.

The day JetBlue is rumored to remove it’s TV service from flights, the long time marketing focus of their “Jet Blue Experience”, one has to wonder what type of death spiral we are continuing to witness.  The airline has already managed to grasp at small incremental upselling tactics such as charging $10 for extra legroom seats, $20 for a second checked baggage piece, and selling headphones (starting June 1st) rather than giving them out complimentary.

Skybus is closing shop.  ATA as well. Given the current state of affairs, it’s a given that we will be witnessing the death of more airlines in coming quarters.