After a 30% hike in the price of gas over the last 6 weeks, airlines are all coming to the startling realization that their business model must change -- and change fast -- if they wish to prevent some major shortfalls. Jet fuel is trading as high as $3.15 a gallon this year, as opposed to $2.17 last year. Airline companies from Delta to JetBlue are each trying to adjust to the new normal by slowing growth, getting rid of less-efficient jets, and cutting back on scheduled flights. Hopefully, this means no more flights Chicago to London with only 5 passengers on board.If there's a silver lining in the dramatic jump in fuel prices, it's the fact that older, dirtier jets will be sold or retired from service, helping to lower the emissions that the airline industry has been taking heat for. Continental is set to retire 63 old jets, replacing them with more efficient jets from Boeing in 2009. Here are some measures that the other major carriers are taking, from the article:
•Delta will dump 15-20 older, less efficient mainline jets, plus 20-25 regional jets. The change will result in a 10% reduction in Delta's domestic flying capacity by year's end. It also will eliminate at least 2,000 jobs.
•United will remove 10-15 older mainline jets to partially offset fuel costs that could swell $1.2 billion more than planned this year.
United has led in raising fares to offset rising fuel prices. But CFO Jake Brace warned that the industry likely won't be able to raise fares enough to fully cover higher costs.
•JetBlue will sell four more Airbus A320s, on top of the six it previously announced that it would sell. In total, 10 A320s will leave the fleet by early 2009.
•US Airways will fly three fewer planes during the second half of the year than previously expected and could cut back further, President Scott Kirby said. But he added that despite tough fuel prices "remarkably, the (travel) demand environment remains pretty strong."
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