Strange world of the airline industry

I don't how much information you get in the UK in the news but I got this yesterday. Many airlines in the US are shrinking in size, routes and frequency because of the costs of fuel. Overseas things are different because airlines like Lufthansa and BA are reporting record profits. Go figurer? They say it has to do with the dollar and the price of oil.

They say it has to do with the dollar and the price of oil.

Well, "they" are right, more or less. There are def some losses due to mismanagement, but considering how high a percentage of the cost of flying fuel is, it's not really surprising.

I'm actually more surprised that BA decided they needed an all business class airline route when so many all business class airlines have gone under

BA (and AA) don't really think they need an all business class airlines, they just don't want the competition of the Silverjets, et al.  For example, AA started flying all business class to Stansted from one of the NY/NJ airports.  They priced their product to be very competitive with Silverjet. 

AA frequent flyers went with AA on the new route because it was cheaper by thousands than flying into LHR and they still got airmiles.  AA has deep enough pockets to lose money on this route, until Silverjet folds.  The day after Silverjet folds, they discontinued the flights into Stansted.

Which raises interesting questions vis a vis anti-trust...are they overcharging the customers to charge them £8,000 for NY-LHR business class?  Or are they losing money to kill competition?

Probably to kill competition, but who wants to compete with that anyways?

BA Citiexpress bought out Manx Airlines several years ago simply to have the early morning Heathrow slot that Manx Airlines had..I don't know how airlines are allocated take off and landing slots but they paid loads for the routes to have this one slot at Heathrow...all to put a jumbo jet on it..they stayed around flying to various places across the UK and they finally pulled out of the IOM last year leaving us with Flybe as our major carrier......how sucky is that?

Probably to kill competition, but who wants to compete with that anyways?

I think it is a bit of both, because the overcharging can't happen if there is competition.  They kill off the start ups, and then they cancel out the routes (which can be hard on those living in less urban locations) or if they keep the route, they increase the airfares, because they can, without the competition.  Most of the new start-ups don't make it because of these predatory pricing practices, and yet governments continually look the other way. 

Oh man, now United is imposing minimum night stays... they're definitely going to loose business travelers, who still make up the heart of the airline industry!