Oil is $110 dollars per barrel, and the economy IS in recession. This, like all things, shall pass. But in the meantime, what does it all mean?
Expect airlines to start parking some aircraft in the very near future. Demand for air travel at the fares airlines are going to have to charge to get by is not there, and a rationalization of capacity is in order. I expect American to start parking some MD-80’s soon. Some will be replaced by more fuel efficient 737’s, but not all. Other airlines will be ratcheting down capacity in short order.
The reduction in flights MAY have a beneficial impact in that it could reduce the number of delays. Time will tell, but expect change in this constantly changing industry in fairly short order. And expect continued fare increases and efforts to unbundle services that were previously included in your ticket price.
