Monday, November 28, 2011

Canadians: I'm Predicting There's a Good chance you'll lose the ability to fly to most places that are not big cities.

I was down in the states this past weekend and on Saturday picked up a copy of Charleston, West Virginia's Gazette-Mail.  One of the front page articles was headlined, "Smaller cities get cut off as airlines shed little planes."

Bottom line, little planes (unless they're private) are slowly being phased out.  Reason?  They're the least efficient and the cost of fuel is skyrocketing.  Anything under 50 seats will likely be sold in the coming years.  Already 27 small airports in the continental U.S. have lost service from well-known commercial airlines in the last two years.  More shutdowns are planned.

That means people from smaller centers will need to drive much further to catch a plane to where they are going -- for vacation, business, family matters.  And sometimes, that road travel is in the opposite direction to where they want to go.

In the late 1990's, when fuel was one-fourth the price, the airlines bought small planes like crazy.  Two manufacturers alone sold over 1,900 of these smaller 50-seat jets.  Now paying four times the amount for fuel, airlines still have to spread it over all the passengers.  On a 50-seater, an airplane takes 19 gallons per passenger for 500 miles, but only 7.5 gallons for a plane with 160 seats.

How long do you think it will take Air Canada and WestJest to figure this out and start thinking like Delta, United Continental, and others?  I'm the last guy to give anybody stock market tips -- but somehow I think "car rental businesses" may be a good bet.

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