TED is Dead

United's no-frills carrier the latest casualty of the world airline crisis

United Airlines' TED, launched with great fanfare five years ago to compete with such low-fare carriers as Southwest and Frontier, will fly into the sunset by early 2009. Seventy planes (15 percent of the fleet, including less fuel-efficient 737s) will either be retired or retrofitted as mainline United planes, including a first-class cabin that will theoretically produce more revenues. United is expected to cut 1,100 jobs as well. Bloomberg, which tracks financial data, reported that while United's stock has been the worst 2008 performer among 14 publicly traded airline stocks, it rose 61 cents to $9.14 yesterday. Leave it to Wall Street to find cheer in other people's misery.

And, for travelers, there's more probably more misery to come. Bloomberg also noted that US airlines have already announced 5 percent capacity cuts, but quoted Ray Neidl, a securities analyst with Calyon Securities, as saying that airlines "need" to cut 20 percent to achieve some kind of industry--wide financial stability, given the current price of fuel. That's going to leave a lot of travelers scrambling for fewer seats, paying much more to fly, taking the train (Amtrak is already seeing record passenger loads), Greyhound, filling our tanks with increasingly expensive gas or staying close to home.

Addendum on June 6: Today's New York Times ran a business analysis called "Big Airlines Rush to Go Small." Reporter Micheline Maynard's piece began, "With fuel prices almost double what they were a year ago, airlines have switched strategies from expansion to downsizing." And she proceeded with a laundry list of which big airlines are becoming smaller and in what way, also noting, "For passengers, it all means a system that made flights cheap and plentiful is slipping away." And that's pretty much what I have concluded.