Airline woes still deepening

But the carriers' problems have the potential to create friendlier skies for many consumers – although not all.

Most of the majors – which are known as network airlines because of their hub-and-spoke route system – are eyeing the setups of lower-cost airlines like Southwest, which operates a far more efficient point-to-point system. Southwest, which also has a far simpler, consumer-friendly fare structure, is the only major airline to make money last year.

Airline executives are studying ways to incorporate some of Southwest's efficiencies. If that happens, it could become it easier and cheaper to fly between major US cities, but harder to make connections and get to smaller places.

In the hub-and-spoke system, banks of airplanes roll into a hub, passengers get off and make connections, then banks of planes leave. It's designed to ensure that the most people can make their connecting flights in the least amount of time. But it means that airplanes sit on the ground for about an hour. When a Southwest plane lands, it usually stays only 20 to 30 minutes on the ground. It's thus far more efficient.

If the major carriers try to mimic Southwest's systems, passengers on direct flights between big cities could see more service. But if they have to make a connection – which about 40 percent of passengers do – they could wait three hours or more.

While such a change could generate some revenues by increasing efficiency, analysts like Clint Oster think it could end up alienating the airlines' best customers: the big-spending business traveler. "Business travelers are not going to tolerate multiple-hour layovers," says Mr. Oster, a transportation economist at Indiana University at Bloomington.

They're also not going to pay the high fares again that propped up airline revenues during the '90s, he says. That means the network carriers are going to have to bring down the dramatic differential between what business and leisure travelers pay.

Some airlines have already experimented with doing away with the Saturday-night stay requirement. They're also watching Europe closely, where major airlines are offering some sharply discounted walk-up fares, like the ones available at a low-cost carrier. Both moves will cost the airlines money.

As a result, the major network airlines have no choice but to get their costs down, analysts say. But no worker wants to give back hard-won raises. And most unions blame the airlines' current woes on bad management decisions in the '90s.

For instance at United, while pilots have agreed to a $520 million wage cut over three years, flight attendants, who make about $32,000 a year, have so far refused. United has asked for $90 million in wage cuts over three years.

"What does that buy, one month? It won't address the fundamental problem if they are facing bankruptcy," says Greg Davidowitch, executive council president of the Association of Flight Attendants. "We could come to work for free, and it wouldn't change their fortunes."

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