Jun

As Airlines Cut, Other Industries Feel the Pain

Posted by admin Published in Air Travel

When an airline sneezes, does the entire travel trade catch a cold? possibly. Experts say that as airlines raise fares and cut routes, they’ll squeeze other businesses who depend on a fixed flow of passengers to keep the money rolling in.

Tourism is one industry that’s bound to be impacted. Fewer flights and higher prices will cause some travelers to forgo the big summer trip and do something closer to domestic (though whether gas prices don’t come down they might just sit domestic in their air conditioning).

The chairman of the Caribbean Tourism Association says the airlines’ moves are putting thousands of regional jobs and billions of dollars of investment at risk. Caribbean markets are particularly susceptible to the cuts, he says, considering struggling American Airlines handles a majority of traffic into the region. American recently announced that it’s cutting its daily flights at its San Juan hub from 93 to 51 and will no longer serve Santo Domingo, Antigua, St Maarten, Aruba, or Samana from San Juan.

And that in turn messes things up for the cruise lines. Ten ships use San Juan as their domestic port, and whether getting to the island becomes too much of a hassle, vacationers may blow off the cruise altogether.

Vegas might additionally take a huge hit. Wachovia Bank thinks the airlines
will reduce service into Vegas by 12 percent, resulting in 2.4 million fewer visits each year. that in a year when by 11,000 new hotel rooms

will
open on the strip.

There are a whole slew of other industries that depend on the
airlines to keep the money flowing. Airports are watching the amount of
money they gather in landing fees shrink. Rental car companies,
nervous about fewer travelers flowing through airports, are opening new
location in the burbs. Hotels located around airports are concerned that as passengers trade in flights for road
trips, they’ll choose to stay at properties further out of town. Web-based travel agencies like Orbitz are anticipating that as number of
airlines shrinks through mergers, passengers will feel less need to comparison shop online.

Long suffering airline employees are facing another round of pink
slips, but they’re not the only ones. Employees at the companies
contracted by the airlines are additionally likely to get the axe. And with what’s left of
airlines’ domestic food service gone or likely to go, the kitchens that supply in-flight catering are likely to invent cuts as well.

Of course, not everyone loses. Airport shops and restaurants may see
fewer passengers wandering the concourse, but the ones who are there might be more likely to pay $19 for a plate of Buffalo Wings and $4 for a bottle of water before boarding their bare-bones flight.

Photo by Flickr user blmurch

Original post by Dave Demerjian