Airlines Panic as Recession Grounds Passengers

A steep slide in passengers has airline execs reaching for the panic button, reports the Wall Street Journal. Airlines had banked on the drastic drop in oil prices more than making up for falling demand caused by the recession, but the decline—especially in first and business class—has been much steeper than expected, trashing airline revenue plans for the year.

"With job losses accelerating in January and consumer confidence falling further it looks as though even larger declines in air travel should be expected," the International Air Travel Association warned last month. Airlines are scrambling to fill seats through fare sales but analysts expect they will have to further cut capacity if they are to have any hope of finishing 2009 in the black.
(More airlines stories.)