The fuel shock hitting US airlines is doing more than squeezing margins it is widening a product gap that may take years to close, as stronger carriers keep investing in lounges, premium seating, technology and international networks that weaker rivals may struggle to match.
At the International Air Transport Association’s (IATA) annual meeting in Rio de Janeiro, executives at financially strong carriers United Airlines, Southwest Airlines and Alaska Air told Reuters a divide was growing between airlines with the ability to keep upgrading their offerings and those forced to conserve cash and slow investment.
“Air travel is not a commodity,” United CEO Scott Kirby said in an interview. “Customers care about the technology, the service, the reliability, the product. They want a great experience. They don’t just want a seat.”
Kirby said United expects to recover the full hit from higher fuel costs through fare increases by year-end, even as he anticipates some pressure on demand.
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