Penny Pinching Travelers Find Their Match

With airlines expected to lose nearly $8 billion for the second year in a row, the airline industry has become less generous with customers who want to fly on the cheap. By linking hefty fees with tight restrictions, the struggling airlines hope to generate tens of millions of dollars per year in extra revenue.
In short, penny-pinching passengers may have finally met their match: penniless carriers.

“The industry is losing its shirt, is flat on its back and is looking for every dollar of revenue that it can find,” said David Swierenga, chief economist at the Washington-based Air Transport Association.
Carriers have increased fees for paper tickets and extra baggage, taken away senior discounts and increased the cost of travel for children flying unaccompanied by an adult. Hot meals are gone on many domestic flights and alcoholic drinks no longer come free on international ones.There has even been speculation that carriers could one day offer one rate for passengers who want a meal and another for those who do not.

The airlines have gotten particularly tough with corporate customers, refusing to let them use discounts negotiated by their employer when they purchase cheaper fares aimed at leisure travelers. The cheapest leisure fares are about one-sixth the price of typical business fares.

“The problem for us is that only about one in a dozen passengers is flying at full economy fares,” Don Carty, the chief executive of American Airlines, told Wall Street analysts last week. That’s significant, Carty said, because nearly half of American’s sales come from traditionally higher-paying business travelers. The airlines’ message to budget-minded travelers is simple: We can be cheap, too.

Air travelers began to curtail spending roughly 18 months ago as a result of the economic downturn. The trend was accelerated by last year’s terrorist attacks and, subsequently, the industry relied on dramatic price cuts to lure people back to the skies. The average domestic fare in August was at a 14-year low, according to Swierenga.

The rising popularity of Internet-based travel agents such as Expedia, Orbitz and Travelocity, and the increased market share of low-fare carriers such as AirTran, JetBlue and Southwest (Ryanair Easyjet,Virgin Express in Europe)
To survive, major carriers undertook a wide range of cost-cutting measures. Employees were laid off. Planes were grounded. Schedules were shrunk. And travel agents’ commissions, which had been reduced, were eliminated. But those changes had little impact on the travel experience. By contrast, the stricter rules, extra fees and scaled-back services could aggravate travelers, analysts said.
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I have had to cut some of the article off:
http://www.nj.com/newsflash/national/index.ssf?/cgi-free/getstory_ssf.c…

Personally I think its been very clear for a while now that airlines are going to come down harder on passengers to help generate more revenue.With so many problems in aviation and competition(low cost)and the fear of bankruptcy for airlines,things such as getting even with the passengers who wish to travel on the cheap is bound to happen.However,unflexiblity with fares and higher prices is just more help to the low cost who seem to take away many of the passengers willing to pay less for no frills,from the traditional full service carriers.