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July 22, 2008
In this entry: quotes, warm up questions, discussion questions, resources
VIDEO SUMMARY: 
This video shows how the high cost of oil is affecting the airline industry and its customers. Many airlines are losing money on about 80 percent of their flights and the industry could lose almost $7 billion this year.
Airlines are looking for ways to make up the gap, including charging fees for checking bags, cutting back on services and scheduling fewer flights.
Most officials agree that the cost of an airplane ticket needs to go up, but travelers are so used to cheap fares that airlines fear increases will drive people away.
This video gives a good overview of the crisis and the airlines' dilemma between serving customers and making a profit.
QUOTES:
"The airlines are pulling back capacity as fast as they can because a lot of that demand that's there today, they can't serve and make any money. They're leaving passengers behind, rather than passengers leaving airlines behind." Michael Boyd, president of the Boyd Group
"We have to walk a fine line of, how do you cover those costs without seeming like you're nickel-and-diming your passengers? And it really is a difficult decision." Steve Snyder, spokesperson for Frontier Airlines
WARM-UP QUESTIONS
How does the rising price of oil and gas affect air plane travel? How do you think airlines figure out how much to charge for a seat in a plane? What is supply and demand, how does it apply to airlines?
DISCUSSION QUESTIONS
Should airlines increase the cost of tickets? Why or why not? Is the strategy of charging customers for baggage and snacks a good idea?
According to the principle of supply and demand, what should happen as airlines offer fewer flights? What factors could affect the actual outcome?
If you were the CEO of an airline facing financial troubles because of the high cost of fuel, what would you do to try to make a profit? What would you try to avoid doing no matter what?
RESOURCES:
Transcript of this report
Related NewsHour reports:
Rising Fuel Costs Damage Viability of Fishing Industry
Issues with Large Commercial Carriers Trouble Small Town Airports
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May 29, 2008
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May 14, 2008
Humanitarian Crisis Challenges Myanmar's Isolation
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