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Airlines’ downsizing shows after blizzard

A look at the airline industry after the storm.

Why the blizzard won’t destroy the airlines
Airlines are well positioned to absorb costs of the East Coast blizzard that stranded thousands of holiday passengers, but they might be less lucky if the same type of storm hits next month when business travel picks up. Most passengers stranded this week need to get home from the holidays. Less flexible business travelers are more likely to cancel than reschedule, eating into airline revenue and overriding any fuel savings from scrubbed flights, several analysts say.

How they got backed up
Flights are 80 percent full on average, and during the holidays they run close to completely full. Flights were only about 70 percent full before the fleet downsizing as recently as 2002, so if flights are canceled for a day or two it now takes the airlines much longer to find travelers an empty seat on another flight. The cutbacks came as airlines lost nearly $54 billion this decade, according to Air Transport Association of America. “Lower capacity is far more beneficial to the airlines than the impact of not being able to accommodate a few more passengers in a fluke event like this,” says Hunter Keay, an analyst.

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