A $4 billion loss in the fourth quarter pushed the world's airline industry to a full-year loss of roughly $8 billion in 2008, according to an international industry group. Plunging oil prices failed to help many carriers, due to hedging contracts that locked in higher-priced fuel.
After the sharpest drop in demand in 26 years, oil prices are finally giving in to economic laws and heading downward. But one columnist says oil speculators were largely to blame for the sharp run-up in prices throughout months of falling demand.
Transportation Secretary Mary Peters is on a mission to overhaul how the U.S. pays for its transportation infrastructure. She favors tolls based on use rather than flat fuel taxes, and that philosophy extends from highways on the ground to flight patterns in the air. Although the airline industry disagrees with her proposals to apply surface-transportation-style fees to aviation, "I think she's shown a willingness and a capacity to understand those differences," said Jim May, president and CEO of the Air Transport Association.
Virgin America's entry into the crowded New York/Los Angeles marketplace has lowered fares on the popular route. "Virgin America has definitely driven the price point down," said Rick Seaney, president of FareCompare.com.
Northwest Airlines CEO Doug Steenland says the carrier is studying the possibility of spinning off its Worldperks frequent flier program. Separating Worldperks
"has the potential for significant value creation," Steenland said.