US Airlines May Consider Consolidation to Help Defray Losses

There’s nothing solid yet, but one consideration to help the hard-hit airline industry could be consolidation among carriers.

Airlines are losing money hand-over-fist with hundreds of planes parked and those that are flying half-empty – or less. According to CNBC, one thought would be for carriers to team up and consolidate flights.

“Does it make sense for more than one of us to be flying to a city when there are only a few seats filled on each plane”? one airline executive asked rhetorically in a conversation discussing the situation with CNBC. “It may make more sense to maintain service to that city, but put all passengers on one plane.”

So, how would it work? CNBC used the example of a route from New York City to St. Louis. American, Delta and Southwest all fly the route from LaGuardia Airport to Lambert International Airport. If the route were temporarily consolidated, all airlines would continue selling tickets on the route, but the carriers would agree to put all the passengers on one flight instead of three.

It sounds like a great idea in the interim until things get back to normal, right?

Not so fast.

It might be a great plan, but it’s a complicated plan that will need the approval of the federal government.

Andy Post, a spokesman for the Department of Transportation, told CNBC, “This is an important issue and the Department supports the intent of maintaining a national network of air service to communities across the country. We will have further guidance about how this will be accomplished in the days to come.”

In addition, the carriers themselves will have to work out the scheduling issues as well as a plan for how to share costs.

But for now, it’s much-needed. CNBC noted that just 5 percent to 15 percent of flights are filled to capacity, and on Saturday, March 28, the Transportation Security Administration screened just 184,026 passengers at U.S. airports compared to 2.17 million passengers on the same day last year, a decline of more than 91%.

“I can assure you, we’re losing money on every single flight — and big money — so that can’t be sustained indefinitely,” Southwest Airlines CEO Gary Kelly said during a video message distributed to employees on Friday morning.

“We need to continue flying, as requested, and serving those that need to travel,” American Airlines CEO Doug Parker said late last week in a video message to employees. “These are still extraordinarily difficult times and we need to do everything we can support each other and ensure we do not waste one dollar of this government support.”