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January 01, 2009

Air Travel Forecast 2009

Obama_2
How different will things look with Obama at the helm?
Photo: AP

by Barbara S. Peterson

It's a sign of the times: The Air Transport Association recently put off its annual forecast event for the media, saying, in so many words, that any predictions it issued now would be worthless. But that hasn't stopped other pundits and analysts from weighing in. So here, with a giant grain of salt, is a stab at predicting what's in store for air travelers in 2009:

* "It's the economy, stupid": Air travel will continue to slump in lockstep with the economy; the International Air Transport Association (IATA), which represents 230 airlines worldwide, says it thinks that traffic will be down about three percent. So look for airlines to continue to cut flights, at least in the first half of the year. But oil prices are also expected to be down, which should cushion airlines' finances--in fact, IATA says that airline losses should narrow to around $2 billion from $5 billion this year. More mergers and bankruptcies are possible, but in the U.S., at least, most of the major lines have recently emerged from bankruptcy. Delta and Northwest will be formalizing their recent union; in 2009 the Northwest name will all but disappear from the skies.

* Fee-ding frenzy: The conventional wisdom is that in a recession, airlines won't be able to raise fares since they'll be struggling to fill seats. The airlines' new fees will likely stick for the simple reason that consumers appear to have accepted them. But airlines are also getting better at figuring out new ways to extract money from your wallet by giving you something you might actually want, such as the new WiFi capability that will be launched (in a big way) in 2009 by American, Delta, JetBlue, Virgin America, and others. You'll pay for this, of course; the fees range from $10 for a shorter flight to $13 for a longer trip. But most of us would gladly fork over the dough for an alternative to what passes for in-flight entertainment these days. 

* Change you want to believe in: With the new administration arriving in the capital in a few weeks, look for some big changes in the way government deals with the perennial air travel concerns, flight delays, and passengers rights. As a U.S. senator, Barack Obama co-sponsored legislation to guarantee certain basic rights--clean water, food, and fresh air--to fliers trapped on the tarmac for more than three hours. But that bill went nowhere, and it's unclear whether the passenger rights advocates will be able to overcome strong opposition from the airlines. Obama may have more success on air traffic control: He's pledged to get demoralized controllers back to the bargaining table with the FAA and to plough billions into the long-postponed overhaul of air navigation, which would replace the 50-year-old network of radar towers with a satellite-based system.

* Safety and security: The controversy over airlines sending planes abroad to be repaired or overhauled will likely lead to some attempts in Washington to regulate the practice; Obama has already spoken out in favor of keeping more maintenance jobs in the U.S. The TSA, on the other hand, was a Bush-era creation that seems to have few friends on either side of the political aisle, so watch for attempts to overhaul the bloated Department of Homeland Security and make airport screening more efficient and user-friendly. The trick will be to do this without appearing to compromise security. Meanwhile, screeners are expecting that they will be able to unionize under a more labor-friendly Obama administration. (I observed firsthand the low morale and stressful conditions at airport checkpoints while working undercover as an airport screener.)

Further reading:
* Air Travel: A Hot Topic for Obama?
* Kinder, Gentler Airport Security
* Inside Job: Peterson's life as an airport screener
* On the Fly: The airline industry

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