The Pain Isn’t Shared Between US and Foreign Airlines

Yesterday I read a story in the Wall St. Journal that was good news for overseas airlines, despite the difficulties, layoffs and service cuts that are making times miserable for US carriers. Part of the reason that airlines in the Middle East, Europe and Asia are not having problems is that they pay for fuel with euros, British pounds or Canadian dollars, so they aren’t facing such steep increases. But other factors are helping them as well.

There is also a robust amount of traffic between the oil rich western provinces in Canada and the east, where most people live. The tar sands that are set to produce millions of barrels of oil are mostly staffed by commuters, and this is keeping Air Canada’s planes full.

Another factor that hurts US Airlines versus overseas carriers is the age of their fleets. That’s why both United and American have grounded many of their single-aisle Boeing 737s, they use too much fuel as compared to newer planes. Carriers like Emirates have built up big new fleets of shiny fuel efficient Airbus and newer Boeing liners, these save a lot in fuel and are more comfortable.

The Middle East is where the biggest growth is–last year traffic rose a whopping 11 % and this year, it is set to grow as much as 15%. In the US, last year saw a small 3.8 % growth.