Severe Jet Lag

FROM THE TRENTON TIMES

Airline industry forced to confront problems, changes

Larry Kellner hit the rivet on the head.

"The airline industry is in a crisis," the chief executive of Continental Airlines said yesterday.

Kellner made that assessment as he announced his airline, the largest carrier at Newark Liberty International Airport, would reduce aircraft, flights and staff -- just as other airlines have done. Continental is slashing 3,000 jobs as well as reducing the number of flights 16 percent this fall.

Houston-based Continental is following United and American airlines, which also are cutting back unprofitable routes. It is a tacit ad mission by the carriers their business model is broken.

"Everything is coming together at the wrong time for the airlines," said Kevin Mitchell, president of the Business Travel Coalition, an advocacy group for business travelers. "It means the end of the experiment of deregulation and the democratization of the industry."

But can the airline industry be saved? Analysts say Continental will be a likely survivor because of its competent management, financial strength and good labor relations. But if fuel prices continue to soar, some carriers will not survive, said Harlan Platt, a finance professor at the business school at Northeastern University who follows the airline industry.

"I don't think oil prices will stay at this level, but if they do, some will start to go out in 2009," he said.

If you would like to read this entire story, please visit: http://www.paradigmshiftpr.com/media/placements/severejetlag.htm