In a move that may be imitated by large US carriers like AMR (NYSE: AMR), Delta (NYSE: DAL) and Northwest (NYSE: NWA), British Airways will ground part of its fleet to save money because of the rising cost of fuel.
According to The Times of London, "The airline would park its oldest, least fuel-efficient aircraft."
Analysts are concerned that British Airways may loss money for the next two years. By taking some aircraft out of service, the carrier could ameliorate some of that.
Wall Street may watch to see if big American companies have the sense to do the same thing. Most have debt loads large enough to move them toward Chapter 11, if fuel costs stay high and a rough economy hurts passenger traffic. Major airline mergers, some of which are fairly far along, will not solve the gas price problem. Taking jets out of service may, at least in part.
Douglas A. McIntyre is an editor at 247wallst.com.











Reader Comments (Page 1 of 1)
5-19-2008 @ 8:13PM
Kris Marshall said...
I don't understand how grounding airplanes is going to restore profitability when the airlines are already running at capacity. Are they saying that there will simply not be enough seats for everyone who wants to , to fly?
6-01-2008 @ 6:05AM
Balhert said...
Please change "loss" to "lose."
5-19-2008 @ 8:41PM
Doctor Bob said...
Can't get a flight? Tickets too high? Hassles at the airport? Cancelled flights? Lost luggage? Cramped old airplanes? No food on the planes?
One word: AMTRAK!!!
5-19-2008 @ 8:53PM
Mary Alice said...
May I put this decision on a more personal level . . .The family will not take the Hummer for this trip. The Prius will be the vehicle of choice. The Hummer consumes more fuel for the same distance traveled. The Prius uses less fuel for that distance. The Prius is more economical. The airlines will be using the more fuel efficient planes for the flights. The "guzzlers" will be the planes of last resort.
5-19-2008 @ 9:31PM
bruce said...
ECONOMICS LESSON. AIRLINES USE LESS FUEL (5 AIRLINES ARE OUT OF BUSINESS AND USE NO FUEL) AND OLD AIRPLANES SIT ON THE GROUND AND DON'T USE ANY FUEL, WHERE IS THE PRICE OF FUEL GOING??? DOWN OF COURSE. WHERE ARE THEY GOING TO STORE ALL THAT EXCESS FUEL. WILL THERE BE ENOUGH SEATS FOR ALL THE PASSENGERS? ONLY THE ONES WHO WANT TO ACTUALLY PAY FOR THE COST TO FLY. AFTER 35 YEARS OF PILOTING, I'M LAUGHING MY BUTT OFF AT YOU PASSENGERS. UNTIL THE AIRLINES ARE RE-REGULATED, LOOK FOR MORE MISERY. ME? I GOT OUT 3 YEARS AGO. STILL GET PAID, BUT ONLY TO SIT ON THE WHITE BEACH JUST DOWN THE STREET IN HAWAII.
5-19-2008 @ 9:32PM
john mournian said...
I hate to say this, but don't blame the oil producing nations__hang it on the gasoline, diesel, and lubricating oils companies. They have all made (in their own words by record reporting) immense
profits. The culprit; I think it is the TRADERS that
continually boost the price/barrel just as they did when California (and other states) got hit with those super large electric bills. Want to stop this?
Everybody, and I do mean everybody, stop buying gas for a few days, stay home, make love, take walks, talk to your kids, work on your hotrod, walk to a movie or a museum__that will put a dent into the producers and OIL companies as well.
Smokescreen
5-19-2008 @ 9:57PM
A J said...
Less planes = less seating capacity
Less seating capacity=packed aircraft
Packed aircraft=high ticket prices
Basic business.
5-20-2008 @ 12:07PM
JT said...
Doctor Bob had a good Idea! Sadly time is a factor in most peoples travel plans. Example: Phoenix to San Diego 3hrs by air (airport wait time included). 6.5hrs by car. 18hrs by bus or train (Bus makes many stops and the train must be boarded in another town 50 miles away). It may be a great adventure for a vacation but not if you are on a scheduel.
5-19-2008 @ 10:51PM
Joe said...
I dont fly.
5-20-2008 @ 6:19PM
teltech54 said...
The airline industry will shortly go into a nosedive that nothing will be able to pull them out of it. Be prepared for some major setbacks. As oil goes to $150.00 by Sept 25th more airlines will fold. First the smaller ones, then the larger ones. By the end of the year the government and economists will finally admit we are in a DEPRESSION.
5-19-2008 @ 11:37PM
Mary Krieg said...
Oh this is Harvard Economics. The airlines have no choice but to create a false supply and demand virtual reality. The park the planes and when their are more people who want to fly than their are seats , they will raise the price and pull themselves out of financial trouble. They have to clean house and run efficiently. Good luck!!. Mary Krieg, business owner
5-20-2008 @ 12:21AM
say it aint so said...
more supply than demand!!! stuffed airplanes will give an illusion the price paid fits the bill!!!
5-20-2008 @ 12:32AM
Web said...
Government bail out next!
5-20-2008 @ 12:53AM
Bob Quick said...
Three years ago, I joined the EAA, and started building my own airplane, that can do about 140 mph, @ 4 gallons per hour, on low octane auto fuel. I might have to land at more rural airports, but there's no waiting in lines, no TSA voodoo, and the like. I'll fly out of my neighbors grass air field, I can walk to. Except for international flights, I'll be DONE with commercial airlines. And because I built it, I do my own annual inspections, as per the FAR's....
5-20-2008 @ 2:38AM
R. Craig said...
STAY AT HOME. SET YOUR HOUSEHOLD IN ORDER. VISIT LOCAL ATTRACTIONS WITH YOUR FAMILIES. PAY OFF ALL OF YOUR CREDIT CARD DEBT.
5-20-2008 @ 3:28AM
James said...
ANOTHER ACCOMPLISHMENT BY THAT IDIOT BUSH. HE REFUSES TO RELEASE THE OIL RESERVES TO HOLD DOWN PRICES AND INSTITUTE PRICE CONTROLS. WE WILL BE PAYING THE PRICE OF BUSH FOR YEARS.....HE WILL GO JUST TAKE A NAP AT THE "RANCH" AND ENJOY HIS RETIREMENT WITH A LOT OF MONEY FROM HIS OIL STOCKS.
5-20-2008 @ 3:58AM
Roberto Benitez said...
Mary, before talking about Harvard economics please learn about basic spelling. Due to price wars tickets are too low to support paying for the current fuel costs. Some of the older jets are extremely inefficient when compared to newer aircraft with advanced by-pass turbine engines. Also, maintenance costs on older aircraft tend to become greater. Parking the older planes may alleviate some inefficiencies.
While the airlines may still lose money, it won't be as bad. It's true that this might force up ticket prices but that's not the main goal. On some routes planes aren't full so increasing seat utilization will also help save money and will also cut delays waiting to takeoff and land or waiting for terminal parking spaces.
5-20-2008 @ 4:24AM
megel said...
You can do your business over the internet. The young proffesional is not that good at talking face to face anyway. Why not just make your contact with your cell phone.
5-20-2008 @ 5:19AM
amos said...
If everone will sit out just just one day. canx planned trips. Walk or ride your bike. The oil company will go beserk.With a storage problem,Its up toyou. Lets start with one day a week that we refuse to buy gas. How about mondays I Have a truck and a car thats been parked for the last 3 months. Be smart do your part I now ride my bike everwhere that i go.Poppa smurff
5-20-2008 @ 5:50AM
ExplodingSheep80 said...
Dr Bob.....going from 100 miles north of San Francisco, CA to Boston, MA, on Amtrak, one-way, wold cost me MORE than flying from San Francisco to London (Heathrow), even just going from where I am to San Diego would take almost twice as long long, and thats before I can get to the nearest Amtrak pick up point.