In more proof that the airlines industry only cares about money and not their passengers, United CEO Jeff Smisek feels that the business is transforming into a profitable industry, thanks to fewer flights and higher fares.
The key to this turnaround is the abundance of mergers that have been going on over the past several years--"for far too long too many airlines were chasing too few passengers," Smisek stated, while speaking at an aviation conference on Thursday,
Smisek used his speech at an aviation summit hosted by the U.S. Chamber of Commerce, to make clear that the industry's profit is still being slashed by " too many taxes, not enough support from the government and could benefit from a modern air traffic control system," reported USA Today.
He added, "a new satellite-based air traffic control system would not only save fliers time but also cut fuel usage by 10%. United alone consumes about 4 billion gallons of jet fuel a year," according to USA Today.
Quickly turning back to profit numbers, United's CEO made it clear that the mergers (United with Continental. Delta with Northwest. Southwest with AirTran and now, assuming the federal government will allow it to go through, US Airways with American Airlines) have helped airlines price tickets at a rational level.
"We priced our product below its cost and tried to make it up on volume. [But now] airlines are run by professionals, looking to make a profit for shareholders," he said.
However, he does thinks flying today is still "an incredible bargain."
"In the bad old days of the industry, people got used to fares that were absurdly low," Smisek said, noting that they didn't even cover the cost of fuel, reported USA Today.
Adding, "This is a business that remains brutally competitive," he told the conference, according to USA Today.
This article is copyrighted by Travelers Today, the travel news leader
