Demise of low-fare carriers could mean higher fares, fewer choices for business travelers
February 9, 1998
Web posted at: 12:28 p.m. EDT (1228 GMT)
(CNN) -- The shutdown of Western Pacific Airlines could eventually go beyond canceled flights and inconvenienced passengers. It could hit travelers across the board where it counts -- in the pocketbook.
"It should be a concern of all consumers because the low-fare carriers are the
one force that has kept airfares in check over the last few years," said CNN business travel consultant Chris McGinnis.
The three-year-old Colorado-based Western Pacific was known for its low fares and creative paint jobs. But in October, the airline filed for Chapter 11 bankruptcy protection -- and never recovered, losing almost $88 million last year.
The demise of Western Pacific comes at a time when most major U.S.
carriers are making record profits. But low-fare airlines continue to struggle.
"This is an example or perhaps a symptom of what's to come for low-fare
carriers," said McGinnis. "We saw Air South go out of business just a few months ago and we've seen a handful of low-fare carriers go out of business over the past two or three years."
Low-fare carriers have cried foul, claiming that some of the larger carriers have engaged in unfair business practices.
"That's a big question right now that the government is looking into -- whether
or not the major carriers are engaging in predatory practices that are putting
these smaller carriers out of business," McGinnis said.
Western Pacific's bankruptcy could have a ripple effect throughout the
country -- even in areas it didn't serve.
"Anytime that you lose a competitor in the airline industry, it's going to have
pricing repercussions for consumers -- meaning higher airfares," said Kevin Mitchell of the Business Travel Coalition.
Higher airfares are one consequence -- not to mention fewer options for budget-minded travelers.
Based on a report from CNN's Business and Travel and Beyond. The segment appears weekdays on Early Edition at 7 AM (ET) and on Morning News at 10 AM (ET).
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