Cut Flights and Increase Profits

2010 looks like the best year in a decade for the airlines:

After a decade of multibillion-dollar losses, U.S. airlines appear to be on course to prosper for years to come for a simple reason: They are flying less.

By grounding planes and eliminating flights, airlines have cut costs and pushed fares higher. As the global economy rebounds, travel demand is rising and planes are as full as they've been in years.

Profit margins at big airlines are the highest in at least a decade, according to the government. The eight largest U.S. airlines are forecast to earn more than $5 billion this year and $5.6 billion in 2012.

U.S. airlines are in the midst of reporting fourth-quarter results that should cap the industry's first moneymaking year since 2007.

"The industry is in the best position - certainly in a decade - to post profitability," says Southwest Airlines CEO Gary Kelly. "The industry is much better prepared today than it was a decade ago."

And Southwest is able to do this WITHOUT all the stupid fees most airlines are charging. Baggage fees, change fees, food charges...you name it. Most airlines are now soaking their passengers to the tune of tens or hundreds of dollars over the ticket price for services that used to be included.

That's why I fly Southwest whenever I can.

I have noticed that in the last couple of years chances are your flight will be nearly or completely full.  Of the six flights I took in January all but one had capacity crowds.  It's good for the airlines, but potentially a problem for travelers who may have problems getting a flight at the time they need and will find fares edging up as demand increases.

This year I got the best fare for the annual Rockport trip that I've gotten in 13 years.  I'll be shocked if I can break that record next year.