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Airlines' bumpy ride jarring local, state economy
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The state of the airline industry is poor in every sense of the word, a former head of US Airways told aviation officials from around Florida who gathered in Estero on Monday.
From bankruptcy filings to a decline in customer service, the past few years have not been kind to airline companies, Edwin Colodny, former president and CEO of US Airways, told participants at the Florida Airports Council Conference & Exposition taking place this week at the Hyatt Regency Coconut Point Resort & Spa.
Florida's tourism-based economy is not immune, said Colodny, a part-time Naples resident.
Between July 2002 and July 2006, nonstop flights from cities around the United States to Florida declined by 28 percent, Colodny said. During the same time available seats on planes to Florida dropped by 14 percent, he said.
"That's disturbing because if the seats aren't there, the dollars don't come," Colodny said.
The decline in flights to Florida reflects a national trend caused by the slow descent of the airline industry, he said.
The last profitable year for the industry as a whole was 2000. Since 1999, 29 airline companies have filed for bankruptcy, Colodny said.
Passenger revenue is $25 billion per year below where it should be based on the historic relationship between spending on air travel and the nation's gross domestic product, he said. About 153,000 jobs in the industry have vanished since Sept. 11, 2001, Colodny said.
STRUGGLING NUMBERS
28 - percent decline in number of nonstop flights from cities around the U.S. to Florida between July 2002 and July 2006
14 - percent decline in number of seats on planes to Florida between July 2002 and July 2006
29 - number of airline companies that have filed for bankruptcy since 1999
On top of that, airline employees suffer from low morale after deep wage and benefit cuts and customer service has all but disappeared, he said.
"Domestic airlines provide service which is at best tolerated by the American public," he said. "I expect passengers will continue to see the same level of service with an occasional extra bag of pretzels thrown in."
In an attempt to maximize profits, airlines are putting more people in fewer planes, said Jerry Allen, planning director for Palm Beach International Airport.
"What we see is a lot of airlines are flying full and cutting back on services," Allen said.
The reduction of available seats to Florida is directly due to cutbacks at Delta Airlines, said Bob Ball, executive director of the Lee County Port Authority.
Ball said he has a more optimistic view of the airline industry.
Though Delta has trimmed its offerings to Florida, low-cost airlines, such as Southwest and Jet Blue, are starting to pick up the slack, he said.
The downturn in the industry is a temporary condition, caused by the market being flooded with product, Ball said.
When larger carriers re-emerge from bankruptcy, they will be more efficient and able to offer a better service, he said.
"I think demand for air travel will continue to increase," Ball said. "This is a temporary condition that cycles though every 10 years."
But the future holds challenges as well, Colodny said.
The cost of fuel, higher fares and a weaker economy could result in modest passenger growth, he said.
There are also environmental considerations, such as carbon dioxide emissions, that airlines will have to comply with, Colodny said.
Airlines that separate themselves from the pack may have to do it with customer service in the future, he said.
"This is a service business. It can't be performed by robots," Colodny said. "Customer service will go a long way to differentiating airlines."

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