The skyrocketing price of aviation fuel will have devastating implications far beyond new surcharges for checked bags and in-flight beverage services, according to a new study prepared by the Business Travel Coalition (BTC). Not only are U.S. airlines and their passengers facing their darkest future, but fast-approaching airline liquidations will cripple the U.S. economy, which depends on affordable, frequent intercity air transportation. Massive job losses, supply chain disruption, declining business activity, shrinking tax revenues, weakened American competitiveness, devastated communities, and reduced tourism are just some of the predictable results from airline liquidations that could happen as early as the second half of 2008 as a direct result of unsustainable fuel prices.
The paper, entitled "Beyond the Airlines' $2 Can of Coke: Catastrophic Impact on the U.S. Economy from Oil-price Trauma in the Airline Industry," expands on the analysis released on June 13, 2008 by AirlineForecasts, LLC and BTC and points to the real news about the airlines' fuel problems: how multiple liquidations at legacy U.S. airlines -- now a serious possibility -- would have a wide-ranging impact on many facets of the U.S. economy. The report will be presented and discussed during a U.S. House Small Business Committee hearing scheduled by Chairwoman, Nydia M. Velazquez (D-NY) for Thursday, June 26. "The airline industry stimulates so much economic activity -- much more than many people currently understand," said BTC Chairman Kevin Mitchell. "Airline networks are an integral part of the transport grid that supports the U.S. economy, and without immediate action to bring down fuel costs, we face the economic equivalent of a major blackout later this year or early next. Unlike in a blackout, however, the cabin lights may never come back on for many U.S. airlines."
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