evening steam trainFrom the June 7, 2008 Peter Greenberg Worldwide Radio show

What did we talk about on the Today show this week? Bus and train travel as economically viable alternatives to plane travel and boy, ain’t that the case?

Amtrak ridership is up 11 percent, and bus ridership is way up.

We have a situation in this country right now that is unprecedented in most people’s history where it is pretty soon it is going to be unaffordable to travel in the traditional way.

This past weekend I broadcast my radio show from Ithaca, New York. What is interesting about upstate New York is that most people in New York City (and I’m a New Yorker) never get up here. A few weeks ago I was in Albany speaking at the governor’s conference on tourism and I had a choice of flying from Albany back to La Guardia or taking the train.

I took the train, and boy, did I have fun. What a beautiful train ride on the Adirondack—it just hugged the Hudson River all the way down to Penn Station and the train ride was $44.

If I wanted to fly on US Air, it would have been $409 with my knees against my chest and praying for a pretzel that you know the airlines no longer gives you.

Very Bad News for American Travelers

Airlines are parking planes in unprecedented numbers. United Airlines parked 70 of them; Continental is retiring 67 of them; American is grounding a number of them. One by one, the airlines are running into the bunker. And, for good reasons, they can no longer afford to operate.

Here is United Airlines parking 70 planes, drastically cutting capacity, and pulling out of some cities that they haven’t even announced yet. Bottom line is this is not about being competitive anymore or trying to seize market share. This is basic survival. It’s not pretty to watch because everybody is going to get squeezed here.

It doesn’t take a brain surgeon to figure out which cities the airlines will pull out of: Hawaii, Las Vegas, Orlando, Fort Lauderdale. Wait, aren’t those popular destinations? They are. Aren’t the planes always full there? They are. But the airlines can’t make money there because they are considered leisure markets. People are paying discount fares to go see Mickey.

If the airlines aren’t parking their planes, they’re sending them overseas where they can make more money from Europeans. Those Europeans look at us as a bargain because of the weakening dollar and won’t even flinch at paying higher fares. They will not even flinch at paying higher hotel fares in New York City where some hotel rooms—and I mean regular hotel rooms—are going between $900 and $1,000 a night now.

We are being priced out of our own market. Forget about going overseas, who can afford to go to New York? It’s Very. Bad. News.

The Great Train Travesty

The real problem here that nobody seems to want to address is, so I am going to address it now: It’s not about the airline business; it’s about the business of America.

train stationLet’s go back to what Dwight Eisenhower said about the interstate highway system. He said Americans did not build the interstate highway system, the interstate highway system built America.

It’s same things about the trains. The trains built America.

We do not look at the interstate highway system as a return on an investment, we just fund it. We should do the same thing with our train system. Our train system is an embarrassment against most other countries.

Now we have a situation where the lifeblood of our economy being driven by what? The airlines. It’s being threatened and nobody is stepping up to the plate because the free market will speak. No, the free market is screaming.

Let’s go back to September 12, 2001 when every airline in this country was grounded for five days. What happened on the sixth day? Did the planes start flying again because we were suddenly safe and secure?

No, they flew on the sixth day because something happened that nobody could have anticipated—banks in this country were on the verge of total collapse. Why? Because no financial documents were moving, no checks were clearing, nothing was moving. It was an order—and nobody wants to admit it—from the Treasury Department saying “We need to get the planes back in the air, otherwise the economy stops.”

When I landed in Syracuse, New York last weekend, I counted lots and lots of empty jetways. And these are not considered like primary locations. Well, here’s what happens. When an airline pulls out of a city, or stops serving a community, five years ago what would happen? A low-cost carrier would come in and fill that capacity.

Well, here’s a news bulletin: There are no low-cost carriers anymore because they’ve got to buy their fuel with the same parameters as everybody else. They can’t afford to do it, so when they take the capacity out the capacity doesn’t get replaced. As a result, we are going to be without central air service. Leisure travelers are going to be completely disadvantaged and business travelers will not be able to afford to fly. This is getting nasty.

Time to Make a Change

We need sort of a sense of a national emergency here to figure out how to get the airlines back. Look we all know how stupid airlines can be. Sometimes the word “airline” and “stupid” are one and the same. But this time it is not their fault.

Look, United Airlines couldn’t make money when oil was $60 a barrel. What makes you think they’re going to make money when it is $125 a barrel? They can’t.

Why do you think the US Air and United Airlines merger didn’t happen? Because US Air took one look at the United Airlines balance sheet and ran. They don’t want debt. This is not good and it is not going to get any better.

Now, having said that we are a nation of addicted travelers. We look at travel as our birthright; we have an entitlement issue when it comes to travel. We need now to lobby our own elected representatives and say hey, guys this is a national emergency, it is not about the airline business, it is about the business of America. If you shut down the interstate highway system it would have the same impact.

lonely trainThe trains are a different story … we need high-speed rail in this country. But guess what? Amtrak doesn’t even own the tracks it runs on—the tracks are owned by the freight trains.

Which is why when you are riding on Amtrak you’ll need to bring your own copy of War and Peace because you know you’ll be reading it. The train has never been on time. At least it is an enjoyable ride, but we need to do better. And right now we have a crisis of unparallel performance when it comes to our air service.

What you have seen this week with airlines parking planes, is just the beginning because here is what is going to happen. The planes will still fly full this summer, so people that want to fly and go to Paris and go to Rome may still go … they just may not spend as many days there.

But then comes the dreaded fourth quarter. And when that happens you are going to see a lot more planes parked because even the Europeans don’t fly in October.

What are you going to do with those planes then?

Read more from Peter’s Travel Detective Blog.

Get more from Peter Greenberg Worldwide Radio

Find out more about what’s really happening in the travel industry in our Travel News Analysis section.