Comments on: American Airlines Cuts Jobs

By: davidlevy

davidlevy — Thu, 04 Sep 2008 16:16:30 +0000

In a weakened economy with rising gas prices, it is expected that airlines will have to start cutting employees. I agree with Patrick, and consolidation can be a path taken by the industry to fight off the rising in prices. Looking in the long-run, another road that can be taken is to better the technology so that less gasoline or alternate sources of fuel can be used. That would ultimately combat any rise in gas prices and secure more jobs for people in the airline industry.

By: teenelson

teenelson — Thu, 04 Sep 2008 16:11:47 +0000

I dont think the thing to do here is consolidate. More consolidation means less jobs, which is the last thing America needs. More time and money spent in finding energy alternatives. Our economy is based on competition, the loss of competitive environment could harm our entire economy.

By: charlesthomas87

charlesthomas87 — Thu, 04 Sep 2008 15:52:23 +0000

I have to say, that I am totally pro-free market and pro-privatization, but in this instance my first instinct towards a solution to the ongoing airline crisis is nationalization. I am just trying to think of the pro’s here.

First, the airlines are given special treatment by the government already, yet still expected to pay the cost of government regulations. Billion dollar bail-outs are paid with tax-dollars and still we see an increase in prices. When other companies in other industries go bankrupt we, in the US, let them die. So goes the free market, but we won’t let our precious airlines die out. We need to choose a side, either allow some Darwinism into the industry, or absorb it into the government.

Second, to go along with the competitive Darwinist view, I believe that the government still does not allow foreign airlines to compete in the US market. If this is indeed true, I think opening up the market would smooth out the supply chain and lower prices for everyone. There is always that issue of security in this post-911 world, but foreign airlines would surely be forced to follow US policies and procedures as while as being forced to spend over a billion dollars a year in security measures, just like US airlines.

Anyways, I feel like the SYSTEM as it is now would function better as a nationalized industry. Otherwise, reorganization is required and government involvement, not in the security sense, but in the business sense (bail-outs, etc.) should be eliminated.

By: tmsiverd

tmsiverd — Thu, 04 Sep 2008 15:44:26 +0000

I completely agree with Patrick’s idea about the consolidation of the industry to combat rising costs. However, if the consumer is left with only a few choices when flying somewhere, the cost per ticket would in my mind increase drastically. Competition is what drives prices down in many cases. In return, for the consumer it may be better to deal with the delays and somewhat craziness in airports rather than a increase in ticket prices due to lack of competition.

By: mingliu2010

mingliu2010 — Thu, 04 Sep 2008 15:38:18 +0000

I guess American Airline is not going to be the only airline which is cutting employees. Since the oil price remains high and there is still inflation going on, airline industries have to do something to get over this crisis. The most direct way to do that is to cut off some employees. Hopefully, afterthe the oil crisis is over, the jobs which have been cut off will come back.

By: cnestler5688

cnestler5688 — Thu, 04 Sep 2008 15:35:46 +0000

I agree with that. Many airlines are already bankrupt which is why customers incur all these random costs like paying for bags and drinks on the plane. They will definitely consolidate in the near future to cut their losses.

By: patricksullivan

patricksullivan — Thu, 04 Sep 2008 15:30:21 +0000

The Airline industry over the next several year will need to consolidate. There is no way around it. The only way to combat rising fuel prices is through consolidation and the cutting of unnecessary costs. I feel that over the next few years many of the major players in the industry will merge leaving just a few Airlines. There will no longer be the wide variety of major domestic airlines as there once was.

By: kush5

kush5 — Thu, 04 Sep 2008 15:28:12 +0000

I feel like this problem with the whole oil crisis wouldn’t be one that would steadily last and have an huge affect on the airline business. Just recently airline stocks have been have been increasing an significant amount due to the drop in oil prices as stated in a business article at star-telegram.com by TREBOR BANSTETTER ( http://www.star-telegram.com/business/story/879507.html). it actually stated that investors had budged AMR up by a margin of $1.17 leaving it at 11.50 per share, along with several other airline companies who are also experiencing an increase in stocks. it is believed that the confidence of the consumer spurs from the less then expected impact of Hurricane Gustav which was slated to have a negative affect on the oil refineries following the Gulf Coast. So i believe that if this type of lift continues for airlines this could be something that would hinder the cutting of jobs and increase in airline costs.

By: mwettje

mwettje — Thu, 04 Sep 2008 15:26:02 +0000

Fuel is such a huge expense when it come to the airline industry. As a result, the astronomical increase in fuel prices has forced them to do something in order to get out of the negatives. Think about how difficult it is to fill up your gas tank now that gas is over $4 a gallon in many areas. This, along with the public’s increased fear of flying, has brought the airline industry much trouble for such a long time now. They needed to do something in order to turn over a greater profit, however, I still feel that cutting employees should be an absolute last possible resort. The investors sure won’t mind it though.

By: alvaroaranda

alvaroaranda — Thu, 04 Sep 2008 15:17:09 +0000

I feel as though AA is going through a downward spiral, the more they raise their ticket prices trying to combat rising oil prices, the less likely passengers are going to fly with them. I know that when i fly into and out of Syracuse American is always my last choice.I believe they are placing to much of the burden on the consumer and that it will eventually backfire.