Volcanic ash clears air for upcoming battle

Europe’s struggle with Iceland volcanic ash that left 10 million people stranded was a painful reminder everywhere about how the tourism industry can’t survive without jet travel, say aviation officials who are now re-evaluating its future role.
 

"The crisis has put in stark relief the critical role aviation plays," said European Union Transport Commissioner Siim Kallas as he outlined measures to prevent a similar fiasco. "Sometimes we do not appreciate something until it’s not there."
 

The event also showed how easy it is to face a global economic meltdown. Airlines and passengers in recent years have not only struggled with bad weather but also the obvious terrorist threats and an over-stretched infrastructure. But it took the cancellation of more than 100,000 flights to make the world think harder about the future of air travel.
 

It’s possible the painful episode will result in improvements for both passengers and carriers, such as better air-traffic control and faster crisis-management.
 

But in the interim, the episode illustrated the widening gap between the “haves and the have not’s.”
 

For richer fliers, the future is bright. Carriers will certainly keep adding services such as in-flight connectivity and business-only jetliners to woo their highest-paying customers, particularly on long-haul flights.
 

But for the vast majority of other air travelers, flying is likely to become an increasingly unpleasant experience with short hops resembling a form of aerial bus travel as carriers attempt to cut costs faster than their rivals, according to airline analysts.
 

Governments also have an important role in the future. Some analysts are urging them to stop piling on taxes and spend more money improving the crumbling infrastructure.
 

And the impact of growing consolidation for travelers?
 

The consensus among airline experts is less choice and higher fares. Surviving carriers work to boost profits by capitalizing on their power to control their markets’ supply of seats and set fares.
 

“The Continental-UAL merger is expected to give travelers another bump in their air pockets. Look for more fees to fly in the formerly friendly skies. God only knows what will come next. The standby fee? Upchuck fee? An entertainment fee for the skit on safety procedures?” parodies the Houston Business Journal in an editorial.
 

"These mergers have to exploit anti-competitive pricing power," said Hubert Horan, a former airline executive in the US and Europe, and now an independent aviation consultant. He said merged carriers must raise fares to cover high implementation costs, such as wage increases to buy labor peace.
 

As a result, fares across the Atlantic — where consolidation has been most dramatic — have risen three times faster than within the US since 2003, according to his calculations.
Airlines argue that competition still disciplines them and consolidation is necessary for the industry’s financial health.
 

However, many disagree.
 

"The cyclicality and fragility of the industry has got to stop," said Jeff Smisek, former chairman and chief executive of Continental Airlines.
 

By David Wilkening