Bad news for airlines as premium passengers shop around

Airlines have enough trouble with falling passengers loads and rising fuel prices. Most carriers that have posted earnings for the second quarter showed losses. Airline balance sheets are so weak that in many cases there is a concern that there could be one or more bankruptcies in the industry if consumer demand for air travel does not pick up in the second half of the year.

First class and business class travelers have always been the most profitable segment of the customer base of airlines. Premium fliers are willing to pay comparatively high fares for being able to book seats at the last minute and to get the amenities of riding in the front of the plane in bigger seats with better service.


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