Airlines Could be Pummeled by Shift by Businesses to Travel Coach

With the economic situation demanding business cut back on their expenses, one of the obvious cuts was in the way their people traveled, which has largely moved from first-class travel to coach, which has the airline industry concerned whether or not the new practices will ever revert back to pre-recession levels.

Continuing lack of surety as to whether we're really in an economic  recovery period at all, and if we are, the strength and sustainability are highly questionable.

In that atmosphere it is thought businesses will probably keep their travel practices where they're at in order to keep expenses under control, and so the airline industry has a huge challenge ahead of it in how to turn a profit when first-class business travel has traditionally been the difference between profit and loss through the years.

Some data to confirm this conclusion is while overall air travel increased by 5 percent in the economy section of the plane, premium travel only increased by 1.7 percent, lending credence to this being a permanent change by businesses.

And even though general business has been picking up, there are very little options for the airlines in that regard, as revenue generated per passenger over 2008 are still five to ten percent those levels, signifying airlines are afraid if they raise their fares customers will cut back on their travel, bringing a new set of problems to the table of cutting rates again. The airlines are stuck for now and there's not much they can do about it.

Some of this is even of their own making via improvements, as some airlines have improved their economy sections immensely with better and larger seats and service. That has shrunk the difference between traveling in economy and premium, and causes people to stay in economy at lower costs.

With losses in the airline industry poised to be a huge $5.6 billion for 2010, it doesn't look good going forward for them, as there's very little, if anything, to show their practices can change and still keep their passenger levels up. They're in for a long struggle.