A US Airways Group Inc. executive said on Thursday that the dropoff in passenger revenue during the current recession is even worse than the decline that happened after the Sept. 11, 2001, terrorist attacks.
US Airways President Scott Kirby told analysts at a conference on Thursday that the outlook for this year is "highly uncertain." He said the carrier's outlook on customer demand only runs about 30 days ahead.
Kirby said demand for business travel has stopped getting worse, but has not started getting better. Airlines typically use restrictions such as Saturday-night stay requirements to make it harder for business travelers to buy tickets aimed at vacationers.
"Not only are there fewer business travelers, those that are traveling are more able to purchase leisure fares that they weren't able to purchase before because of restrictions," Kirby said, and that's depressing revenue further.
"Post-Memorial Day the bookings have been extremely strong, but the pricing environment has remained weak," he said.
Kirby said US Airways brought back a domestic fuel surcharge on Wednesday night, and raised its fuel surcharge for flights across the Atlantic.
He also expects US Airways to reduce some of its seasonal trans-Atlantic flying and said it may make additional domestic cuts as well, although he made no formal announcement on Thursday. US Airways said previously that it expects to reduce total mainline capacity 4 percent to 6 percent.
He said one thing that has helped the revenue situation has been the fees collected for items such as baggage. US Airways expected to collect $400 million to $500 million from the revenue category that includes fees this year.
"This will be here a decade from now, and really is a fundamental change to the pricing structure" for airlines, he said.
