A bankrupt United lays bare airlines’ overall crisis

The bankruptcy of U.S. company United Airlines and the tribulations of other major carriers are revealing an industry overhaul only workers and passengers will be bound to pay for, experts warn.

“Airlines can’t stick to money-losing fares,” said Julio Sorribas, general manager of ANA Travel Agency that does a considerable chunk of its business operations with passengers that fly between the U.S. and Latin America.

“If we compare the cost of every means of transportation measured in kilometers, air fares are now a whole lot cheaper than a ride in the subway, a bus, a train or a car,” he added.

“But airlines provide much more services on the ground, up in the air, with luggage handling, food,” Mr. Sorribas said. “The money (airlines) spend is way higher and this has prompted the cancellation of some routes that used to offer a surplus of seats,” he went on to say.

Moreover, airlines have either curtailed or wiped out commissions paid to travel agencies in the face of losses piled up in the last couple of years and heightened by the overall impact on tourism of the 9/11 terrorist attacks.

A case in point is the layoff notice made by US Airways, a company that will slash more than 2,500 jobs in the coming three months and will reduce benefits to its employees in an effort to minimize costs.

Before the ill-fated September 11, 2001, US Airways had a payroll of over 49,000 employees. Today, after massive layoffs the company has been forced to make, only 35,000 workers still hold down their jobs.

In the same breath and as part of the company’s financial streamlining, the airline will shut down one of its hangars in Tampa, Florida, while its booking and reservation outlet in Orlando will also close.