Skip to main content

Airline cuts could mean fewer choices for more money

  • Story Highlights
  • Airlines cutting seats and number of flights in response to rising fuel costs
  • People traveling to small cities, remote locations will see the greatest impact
  • Continental announced cuts to Guam, one of its hubs in the Pacific
  • People may travel less if prices rise and flight frequency decreases too much
  • Next Article in Travel »
By Mallory Simon
CNN
Decrease font Decrease font
Enlarge font Enlarge font

(CNN) -- For Glenn Wakai, the world is about to get a lot bigger.

Continental  will cut 21 percent of its seats to Guam in response to high fuel costs.

Continental will cut 21 percent of its seats to Guam in response to high fuel costs.

As many airlines cut their flight rosters in September, some Americans who live outside big cities will find it more of an ordeal to fly.

But for those who travel to remote places, like Wakai, who visits Guam in the Pacific, the slashed schedules could mean stopping over in more countries for longer periods of time.

"Technology has made the world seem smaller, but the gas crisis is making the world a lot larger for travelers," he said. "Forcing people to hopscotch all over the Pacific will definitely curtail demand."

With airlines responding to rising fuel costs by cutting flights, people like Wakai may take the biggest hits in both convenience and price, said Rick Seaney, CEO of FareCompare.com.

Although a majority of Americans won't be traveling to places as remote as Guam, Seaney said, travelers will be inconvenienced across the board with fewer flight choices and higher prices. The key, he said, is for travelers to plan well in advance and book before planes start to fill up.

Delta, Northwest, United, Continental and US Airways have announced plans to scale back flight schedules, mostly on domestic flights in smaller markets. See what other steps airlines are taking to cut costs »

AMR, the parent company of American Airlines and American Eagle, said it expects its fuel bill to rise to $10.15 billion in 2008, from $6.67 billion in 2007. Delta estimates that fuel could cost it $4 billion more in 2008 than in 2007. The Air Transport Association predicted Tuesday that it U.S. airlines would lose close to $10 billion in 2008.

Continental, the main airline that provides service to Guam, announced that it will be cutting some of the seats to Guam compared with last year.

Walter Dias, Continental Micronesia's Staff Vice President of Sales, said that although the company's press releasse shows a 21 percent reduction, that figure is actually for the Continental Micronesia entity which is based in Guam. The number also includes a previously suspended flight between Honolulu and Nagoya, which makes up 17 percent of those cuts. The remaining 4 percent of the cuts are related to only 6 flights per weeek -- two between Guam and Hong Kong, two between Guam and Bali and two between Saipan and Manila, Dias said.

The reductions, Dias said, therefore will not impact mainland to Guam service.

Along with fewer flights, Seaney said, those traveling to Guam should expect price hikes.

The fuel surchage from Guam to Honolulu or the US mainland is between $270 to $300 round trip, Dias said.

Seaney said that as companies struggle to combat rising gas prices, they will slash flights, which are often 60 to 70 percent full and combine them in the hopes of making all of the flights 100 percent full.

"If you keep planes full, that allows you to keep prices high," he said. "As soon as you fly empty seats, you are gaining nothing on the fuel you are using, so you have to discount seats. But, if all of the seats are full, the airlines will be able to charge higher prices because of higher demand for the seats."

Seaney said the airlines must walk a thin line.

"The goal for them is to slowly increase," he said. "With each price hike, they are tossing that egg back at the consumer and taking a step backwards. They continue to do this to see how much consumers are willing to pay. Eventually, though, they take a step too far, and the egg breaks -- that is, the consumer stops flying."

But for those who travel for business, the price can't stop them from flying, although they may find themselves having to add a day or two onto their itinerary.

Aulii Limtiaco, who works for the government of Guam and travels there for business, said she normally has to be in Guam for Monday morning meetings. Usually, because of how long it takes to get there, she would leave on Saturday. She worries that if Continental cuts certain flights, it could make her travel schedule longer by having to leave earlier and come back later.

When it comes to vacations, Limtiaco, who has family in Guam, said she already has trouble finding flights that aren't packed at a "decent" rate -- and that's early in the year, booking for December. So if prices go up, Limtiaco may have to reconsider some of her plans.

"I probably wouldn't go as often," she said. "Let's just say a coach ticket is a little less than $2,000. If that went up to even $2,500 per ticket -- for a family of three or four, that's a lot of money."

Gerry Perez, general manager of the Guam Visitors Bureau, said that although the island is very much a tourist destination, he believes that the negative effect as a result of the cuts would be marginal.

advertisement

But Wakai said that if prices go too high and flights become too difficult to work into people's schedules, they may just stop coming.

"That is where Continental's decision will be felt the most," Wakai said. "Fewer dollars, people and commodities will be flowing through some of the most remote areas of the planet."

All About Air TravelContinental Airlines Inc.Guam

  • E-mail
  • Save
  • Print