Fuel Prices

02 Aug 2008

Runaway fuel prices and a weakening economy are forcing airlines to taper international expansion his fall, reducing the growth of new flight options from the U.S. to the slowest rate since 2003. For October, airlines increased seats on non-stop flights from the lower 48 states to foreign destinations by just 1% compared with last October, according to a USA Today analysis. Last year, they boosted seats by 5%, adding non-stop routes and frequencies to business destinations throughout Asia, the Middle East and elsewhere. According to a Sabre Airline Solutions analysis of fares bought through Sabre's computer reservations systems by June 30 for October travel, the average round-trip fare for an international ticket was $969, up 11.3% over a year ago. In contrast, the average round-trip ticket for a domestic flight was $309, 8.8% more than a year ago. (Page 5B, USA Today)

As travel costs rise and airlines cut service, companies large and small are rethinking the face-to-face meeting--and business travel as well. At the same time, videoconferencing technology has matured to the point where it is often practical, affordable and more productive to move digital bits instead of bodies. Accenture, a technology consulting firm, has installed videoconferencing rooms at its offices around the world and plans to have an additional 22 operating before the end of the year. The company figures its consultants used virtual meetings to avoid 240 international trips and 120 domestic flights in May alone, for an annual saving of millions of dollars and countless hours of wearing travel for its workers. The emerging trend, analysts say, goes well beyond a reaction to rising travel costs and a weakening economy. "These technology tools are going to change the way corporations think about travel and work in the long run," said Claire Schooley, an analyst with Forrester Research. (Page C1, New York Times)

Last year, US Airways was the worst among major airlines in on-time performance. So far this year, it's No. 1. The turnaround has been dramatic, especially considering that much of the airline's service is in the Northeast where air-traffic congestion has been particularly brutal. But even at the nation's worst airports, US Airways has run more or less on time. To improve its on-time performance, the carrier rallied its work force to focus on one goal--getting the planes pushed back from the gate on time--and began offering financial incentives to workers for better service. (Page D3, Wall Street Journal)