Will US airlines make a turnaround in 2009?
Their cost-cutting in recent years could pay off. But longtime problems remain.
America's aviation system was once the envy of the world, with its cutting-edge technology and stringent safety standards.Skip to next paragraph
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Now it's at best a "B" player, and American travelers have become accustomed to aging, crowded planes; regular delays; and indifferent customer service.
But the advent of a new administration in Washington is fueling hope that some underlying causes of the aviation malaise can be addressed – from the archaic air-traffic control system to the congested airport runways.
The incoming Obama administration is expected to dedicate at least $5 billion in its stimulus package to upgrading airports and other aviation-related projects. Congressional leaders have also pledged to move quickly to pass a long-delayed reauthorization of funding for the Federal Aviation Administration, which would include money to upgrade the air-traffic control system.
But even the optimists warn it will take years for the US aviation industry to recover its status as a world leader, and they caution that the airlines' problems cannot be addressed alone. They're calling on the Obama team to take a significant step back and address airline issues within a larger context.
"No piecemeal solution is going to work," says Robert Mann of R.W. Mann & Co., an aviation consulting company in Port Washington, N.Y. "Somebody has to really step back and take a big-picture view: all the disciplines – environmental, economic, and transportation and energy policy – together. If things are done in a vacuum, they will absolutely, positively cripple some segment. "
US airlines have become accustomed to operating in economic-crisis mode, and that's expected to serve them well during this recession. Since 9/11, they have lost tens of billions of dollars, laid off tens of thousands employees, cut back their flight schedules, and restructured their operating costs. Several have been in and out of bankruptcy. Last summer's unprecedented spike in the price of oil was just one more challenge.
But all their trimming and reorganizing, combined with the recent drop in fuel prices, have helped prepare the airlines for the current challenges. Some analysts are even predicting that the industry as a whole could be profitable this year – which would be only the second time since 9/11.