Airlines Respond to Soaring Fuel Costs, Japan

Boeing_737-890_and_737-824_(Alaska_and_Continental)  by Kevin Payravi.jpg


Major airlines have moved aggressively to rationalize fleet use in the wake of higher jet fuel prices. With a jump of more than 60% since last summer, Delta, Continental Holdings, and Air Canada have all trimmed growth plans for the remainder of 2011.

Delta has announced a 25% reduction in flights from their Memphis hub with a corresponding 8% drop in passenger capacity there. Delta's overall U.S. domestic capacity will drop from a 2% planned increase to a 3% reduction. Transatlantic service will be cut by 4%, while a planned 13% increase to Asia will be trimmed to 4%. Revenue is expected to drop by some $150 million due to events in Japan.

Continental Holdings has announced flat capacity growth, down from an overall expected year-on-year increase of 3%. Expansion of international capacity at Continental-United will continue at 3%, but will be offset by a 3% reduction in U.S. domestic seat availability.

Air Canada has also come under increasing fuel-related pressures announcing layoffs of 600 staff across its network. Cancelled routes include Ottawa-Washington Dulles, Montreal-Washington Dulles, Calgary-Chicago, and Calgary-San Francisco.

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