There must be something in the high-altitude air that airline executives are breathing.
Despite what aviation industry officials say is the worst pricing environment in history due to a dramatic drop in business travelers, the nation’s airlines are planning to raise business fares by as much as 7 percent next year, according to two new surveys.
American Express says it expects that airlines will raise prices by up to 4 percent as business travel begins recovering. The National Business Travel Association said fares could rise 7 percent.
“Many [companies] will see their average fares rising now that airlines have put new restrictions on the lowest fares and stopped applying corporate discounts to them,” said Brian Mogler, vice president, supplier relations and consulting, at American Express Corporate Travel.
“Barring further economic downturn, business travel demand is likely to improve, creating upward pressure on pricing,” he said.
United reduces routes: Elk Grove Township-based United Airlines has begun shrinking the number of routes its operates, a move it announced in August.
The airline said it dropped its daily departures on Thursday to 1,775 from 1,897 “to match the dip in demand.”
The schedule reduces frequency in several Chicago and Denver markets. The airline said it is reducing nonstops such as Chicago to Philadelphia or Vancouver and is re-deploying those planes to winter destinations including Florida and Arizona. In addition, the airline is eliminating most late-evening flights from Denver to the West Coast and canceling select off-peak flights in Chicago and on the West Coast.
Under the new schedule, O’Hare International Airport will continue to be United’s largest hub. The airline said 389 flights are departing each day from O’Hare, while 234 flights are departing each day from Denver International, United’s second-largest hub.
“Despite our outlook for reduced traffic this season, we expect strong results over the Thanksgiving holiday,” said James Starnes, manager of schedule planning.
Despite the reductions, Starnes said United will respond to increases in demand. “Based on joint analysis by revenue management and scheduling, we have added almost 200 flights to the schedule between Nov. 26, and Dec. 2,” he said.
McDonald promoted: Peter McDonald, who over the last year was behind the successful effort by United Airlines to overhaul its airport operations and improve performance, has been named executive vice president in charge of all of the airline’s operational divisions. He will be in charge of Maintenance and Engineering, Flight Operations, Onboard Service, System Operations Control, Airport Operations and Information Services and Safety.
“United’s on-time performance is excellent,” said Glenn Tilton, United’s chairman, president and chief executive. “In fact, we have set or broken operational records nearly every month this year. Pete has been leading our airport operations through this great performance and he has consistently demonstrated the ability to foster the kind of teamwork it takes to be a leader in the industry.”
More Top Picks Best Karaoke Machines With Screen
American donates plane: American Airlines on Friday will donate a Boeing 727 jet to the College of DuPage and the Aviation Professional Education Center, which opened earlier this week to train certified airplane mechanics. The plane had been operating in daily service until last year when it was grounded as a result of the drop in passengers.
“This is the culmination of three years of development and we’re glad the program is now a reality,” said Don Laddick, president of the education center.