The airline industry crisis was succintly understated in a quote in the New York Times last week: "Said John P. Tague, United’s chief operating officer: “There’s going to be a period of adjustment in the last half of the year that will be unpleasant.”
Downright nasty and brutish may be more like it. The evidence continues to pile up: The airlines' fuel-cost crisis is very real and many communities are going to be affected by it. There's little indication yet that PHL will be hit hard this fall, with US Airways planning few cuts in its schedules. But most other carriers are likely to be offering fewer flights to their hubs from Philly unless oil prices were to fall, something that seems increasingly unlikely. The real concern for PHL fliers is the one they have confronted repeatedly over the years, each time US Airways gets into financial trouble and / or goes into Chapter 11: What if US were to fail or substantially reduce its operations? The thinking has always been that the region would fare better than smaller cities because its population is large enough to have a range of flights, even in the worst of circumstances. Without a hub airline, PHL would lose its status as an international gateway for years, but that could be regained, couldn't it?
That optimism may be looking to the past and not the immediate future. What happens if there are multiple major airline failures? What if one or more big carriers has to liquidate, unable to reorganize in bankruptcy court? A few weeks ago, analysts were calculating what $130-a-barrel oil would do to airlines, and it was very ugly. This morning the cost is climbing toward $150, so there's no good news here. Two stories in other publications from the last few days provide more detail: Read one from the New York Times about deep flight cuts this fall, and another from the Dallas Morning News about falling airline stock prices.
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