US airlines are the backbone for the US economy

alokin · Intermediate Crude Joined: Aug 24, 2007 Posts: 872

I read in "der Spiegel" that the US economy cannot exist without the airlines. This was the statement of the air transport Association. If the airlines go bancrupt the economy will go down.

Jack · Dark Lord Joined: Aug 11, 2004 Posts: 5123

It's probably accurate.

The problem is not the airlines, but rather those who depend on the airlines. Tourism is a large industry that employees substantial numbers of relatively low-skilled workers. If the airlines fail, tourism is likely to decline. That decline would impact hotels, restaurants - and the budgets of cities and states that depend on sales taxes and hotel-motel taxes.

Tourism supposedly counts for 7 million jobs....

LINK
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Denny

Jack · Dark Lord Joined: Aug 11, 2004 Posts: 5123

I'm sorry, Denny, I wasn't clear.

I was referring to U.S. domestic tourism. We have a great deal of travel within the U.S. - and cities depend on it.

There is, as you point out, international tourism, but it pales in comparison (for most cities within CONUS) to domestic tourism.

As for short-range car travel - yes, that's likely. Unless the economy continues downward...

Cool

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alokin · Intermediate Crude Joined: Aug 24, 2007 Posts: 872

Australia has a lot of tourism as well and this industry mi8ght fail, as most vistors are overseas, I believe.

But it is not only the tourism.

heroineworshipper

If that was true, there would be a lot more people in aerospace engineering instead of dot coms. Suspect airlines are paying to get more coverage. Seeing a lot more TV interviews being done in airplanes, as if the person was traveling too much to do an interview.
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timmac · Heavy Crude Joined: Mar 27, 2008 Posts: 252

Tourism is not just built on airline travel,, its built mostly on expendable extra $$$$$,, with the cost of gas/food/utilities/etc going thru the roof there is going to a lot less expendable $$$$$ around and tourism is going slow down a lot,, here in Vegas we are now seeing our slow down,, the frist slow down in 10 years and it looks as if it might even get worse,, and to say that people will travel closer to home and that will help with there local tourism,, not here in Vegas, we have only 1.9 million people living here but 33 million travel here each year, if oil hits $250.00 a barrell Vegas will be a dust bowl....

TreebeardsUncle · Intermediate Crude Joined: Jun 15, 2006 Posts: 598

America can do without the commercial airlines and their associated tourism. The economy here depends on the selling of mortgages, and the driving of automobiles.

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cube · Fusion Joined: Mar 12, 2005 Posts: 3776

It seems that EVERYBODY wants to argue that the industry they are working for is super critical to the well being of the entire universe so therefore the government should bail them out. I never knew truck drivers, airline pilots, and mortgage lenders would ever have something in common!

There have been many examples of government bailing out big business but I think this time it's different. Back in the days usually there would only be 1 industry coming to the gov. hat in hand begging for a bailout. Now it seems there's a dirty dozen different industries ALL trying to grab at the same economic pie. I don't think that's physically possible. Therefore that has to be a couple industries that will receive no help.

If I had to guess, I think society will choose to bail out airlines before trucking.

MrBill · Expert Joined: Sep 15, 2005 Posts: 5642 Location: Eurasia

Basically in Canada almost all airlines eventually went out of business except Air Canada that used to be our national carrier. Now I think there is just West Jet and maybe a few charter airlines? Someone correct me if I am wrong? However, now as Air Canada is the defacto only airline, and is part of the Star Alliance, good luck finding a cheap ticket. Between Frankfurt and Calgary there is only Lufthansa and Air Canada. Both are in the Star Alliance, so the flight is a code share. No competition there.

Domestically there is also very little direct competition, unless you re-connect through a US airport I suppose. So domestic flights are also very expensive. But it is a vicious circle. As prices climb out of the reach of travelers the airline is forced to cut back on routes and the number of flights. As flights become more expensive would-be travelers stay home. Travel for most is still a luxury item. But there are many substitutes, so demand is very elastic. The high end of tourism will always exist. But it is the mass tourism that depends on cheap flights. And the masses ain't doing very well lately.
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Every single flight I am on is completely full of business travelers and I fly a lot. A lack of affordable air travel is one more huge blow to the US economy, but I don't think it's tourism necessarelly, it's legions of sales and customer service people.

30 years ago, a lot of businesses had a hard time buying goods or services from a non local outlet. Since then, customers have become comfortable with using a non local vendor. I think this was in large part due to lowered prices and competition between airlines which made flying relatively cheap. Company representatives, technicians, etc, could fly out on a moment's notice to take care of issues quickly.
With vastly reduced flight schedules and high prices, that will no longer be possible and I think it will have a huge dampening effect on the economy.
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MrBill · Expert Joined: Sep 15, 2005 Posts: 5642 Location: Eurasia

"Those airlines can't offer low fares to that degree which will stimulate net new traffic because the fuel cost component of offering a fare is so high..."

IgnoranceIsBliss

I'm pretty sure we will see an effort by the US gov't to subsidize the airline industry. Otherwise, I don't see how we can have a functional system going forward into 2009 and beyond. Major failures by the airlines would ripple through the economy and also cause panic by US citizens.

I dislike the idea of spending tax dollars to subsidize airlines (which are producing so much CO2 and contributing to global warming and air pollution). I would rather see cleaner bus and rail systems subsidized. (or spend that money to build a clean transportation infrastructure) A lot of our air travel these days is not necessary, including some business travel that could be replaced with teleconferencing and the like.