Airlines have begun releasing earnings reports for last quarter and the consensus is the worst may be over for airlines.  While the news could have been better, it indicated that the industry maybe heading for stabilization after a long ride down.  While observers point out that this news could be worse, the fact that airlines have reached the bottom means they will still have to climb out to reach previous heights.

As the airline environment has changed, some airlines have started to progress towards profitability.  Southwest airlines recently released a report stating it had finally broken a string of successive losing quarters, making a small profit in the previous quarter.

Continental airlines president and chief operating officer, Jeff Smisck stated, “we don’t know when a recovery will come, and there’s a lot of uncertainty about the economic environment.”
A large fear expressed by executives and observers alike, is that the airlines may stay at the bottom without any potential for a rebound.  The key to positive growth in the airline industry rests on higher customer traffic.

Smisck commented, “Our success is highly correlated with the return of business travel, and we haven’t seen signs of that yet.  So while things appear to have stabilized, they’ve stabilized at low levels.”

Gary Kelly Southwest airlines chairman and chief executive has seen signs of stabilization in the market over the last quarter. But Kelly also warns “there is no reason to believe – based on history – that business travel will pick up sharply anytime soon. It certainly didn’t in ’91. It didn’t in 2001.”

The decline in business comes on the back of a long list of problems for the airline industry. In 2008, soaring fuel costs forced airlines to cut capacity by slashing excess flights.  It is hoped that the cuts in capacity combined with lower fuel costs will lead to profits in the future.

Thanks to www.dallasnews.com for above quotes, for more information visit their website.