The airline industry reported that it filled up more than 80 percent of available seats in April, 2006. Yet the airline industry continues to lose money hand over fist. That is what happens when you sell a 10 dollar steak for 5 dollars.
The competition in the airline industry on price is killing it. Until the airlines figure out this lesson that competition does not mean destruction the industry will continue to be in turmoil.
And the early results from April, which indicate that more than 80% of U.S. airlines’ seats were filled with paying passengers, portend a record-setting — and uncomfortably crowded — summer travel season ahead.
Seven airlines that have reported for April all show fuller planes. No. 4 Northwest ran fullest: 84.9%. No. 1 American filled 81.7% of its seats. And No. 5 Continental filled 82.9%. No. 3 Delta, despite a public battle with pilots over cost cuts that included threats of a strike or shutdown in mid-April, filled 77.6% of its seats. Even discounters Southwest and AirTran, which normally record load factors lower than the big network carriers, came close to filling 80% of their April seats.
For all of 2005, the domestic airline industry filled 77.6% of its seats, according to the Air Transport Association. The April numbers are good news for an industry that has lost more than $40 billion over the last five years. Better yet for the industry, travelers have been paying on average about 13% more for their tickets than last summer. via USATODAY.com