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Friday, January 8, 2010

Tighter security could cost airlines if travel demand drops


The restatement of the obvious: "U.S. airlines could lose hundreds of millions of dollars in revenue and foregone profit if even a small percentage of would-be travelers stay home rather than face tighter airport and airline security, some analysts warn.

"A 1% drop in demand would be equal to a revenue hit of more than $1 billion," says analyst Vaughn Cordle at AirlineForecasts. "And because airlines are so highly leveraged, nearly all of that would come off their profit bottom lines."

The 737 I was on yesterday has 23 rows of 6 seats. That's 138 seats with maybe some reduction for a lost seat by an exit door. Minus a few more if there's a first class cabin.

An average of 100 people per flight seems a round and in the ballpark figure. So they only have to lose about one person on each one of those planes.

Is it possible that the real motivation of the terrorists is to force consolidation in the airline industry?

Location:Westgrove St,Raleigh,United States

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