US airlines face tough months ahead

Airlines in the United States are gearing up for challenging months ahead, as record high fuel prices and fears of a recession chip away at the revenues generated by most carriers. Many airlines are responding by cutting capacity and even suspending routes that were considered to be profitable in 2007, but are not likely to remain so, due to less favourable economic conditions this year. According to a report by the Reuters news agency, JetBlue Airways, a discount carrier, has published more modest growth projections for this year and noted that it would cut back on any plans to augment the airline’s capacity. Originally, the carrier had announced that passenger capacity would be expanded by 13%, but JetBlue has now revised this, noting that the figure is more likely to be between six and nine per cent. Robert Mann, a commercial air travel consultant, argued that skyrocketing fuel costs will make an increasing number of domestic routes unprofitable. Dave Barger, JetBlue’s CEO, noted that his carrier would “grow more conservatively” in light of the high gas prices, as well as a predicted slowdown of the

US economy.

US carriers, however, many find it a challenge to grow at all, especially according to projections produced by James Parker, an analyst associated with Raymond James & Associates. Parker predicts that capacity will actually decrease by about one per cent during the course of the year, due to a fall in the number of passengers. Parker, however, believes that airlines will have to scale back their capacity even further, in order to successfully cope with the challenges ahead.

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