A government report says airline passengers can expect fewer carriers to choose from, fewer flights to smaller cities and more baggage and other fees.A government report says airline passengers can expect fewer carriers to choose from, fewer flights to smaller cities and more baggage and other fees as the industry continues to grapple with high fuel prices and a weak economy.
"The industry has experienced considerable financial strain that has led to more than 50 U.S. passenger and cargo airlines filing for bankruptcy in the last 12 years," the report by the Department of Transportation's inspector general states. "Ultimately, these changes to the operating climate have fundamentally challenged the industry's ability to sustain itself using its old business models."
Bankruptcies and mergers cut in half the number of airlines accounting for the bulk of domestic flights, to just five: American, Delta, Southwest, United and US Airways.
If US Airways and American merge, that would fall to four.
The report says fuel rose from 10 percent of airline operating expenses in 2000 to a peak of 40 percent in 2008. Last year, fuel accounted for 35 percent of expenses.
To cope with increased costs and decreased demand for air travel, airlines have instituted additional fees for everything from checking baggage to selecting seats or even the use of a blanket on flights. One average, these fees increase the cost of a flight$19 per round trip, according to the report.
Baggage fees along accounted for $2.7 billion in additional revenue in 2011 for the airline industry, according to the report.
Passengers can expect more fees and fewer flights in the near future as the airline industry struggles to find new business models, the report concludes.
- Staff and Wire Reports
