Did you know you’re paying for this?

The federal government is paying out $113 million a year in airline subsidies in exchange for serving small communities that (in theory) can’t support the service based on the business they provide. Federal taxpayers are spending up to $567 per passenger to subsidize air service to rural communities that may have as few as two or three air travelers a day. Some more snippets from the piece: _ The federal cost has jumped from $22.6 million in 1996 to $113 million this year — a fivefold increase. The increase is explained in part by a growth in the number of communities served from 97 to 135 and rising expenses, such as fuel. _ The average per passenger subsidy paid to airlines nearly tripled to $229 per passenger for each flight in the 48 continental states…

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Stating the obvious

The internet is displacing travel agent and airline reservation agent bookings. An interesting fact: Last year, more than 30 million people bought at least one ticket over the Internet How significant a phenomenon is this? Airlines are taking note and shifting more of their resources toward the medium to reduce the costs associated with selling seats, typically their third-largest expense, behind labor and fuel. Experts say it’s paying off. Last year, the airline industry generated about 17 percent of revenue from leisure tickets sold over the Internet, said Henry Harteveldt, senior analyst for Forrester Research, a consulting firm in Cambridge, Mass., that identifies and analyzes trends in technology. Harteveldt, who focuses on travel services, predicts that at least 19.2 percent of the revenue generated next year by the airlines will come from tickets sold over…

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