Aeroflot - Russian Airlines JSCMoscow, Russia

Economy Hurts Smaller Carriers - The negative impact that the current US economic downturn is having on airlines is no secret: fuel prices are high and fewer people are flying. According to industry experts, these factors are hitting smaller, or "discount," carriers harder than larger airlines, such as American or United. Discount carriers focus more on leisure travel, and those travelers are less willing to pay higher fares than the business travelers who make up a large percentage of major airlines' passengers.

Rewards Grow More Popular as Fares Rise - Flying domestically in the US is more expensive in 2008 than 2007; some industry experts estimate fare increases of up to 40 percent in one year. The prices are boosting the popularity of frequent flier programs, which allow customers to accumulate points through shopping or flying often, and redeem them for free or discount travel. However, because of the rising cost of fuel and other expenses, major airlines have increased charges for using frequent flier points and the number of points required for redemption on many routes.

Airline Actions to Boost Profits - Facing poor economic conditions, major airlines are cutting jobs and decreasing the number of routes they fly, in addition to raising ticket prices. While these actions may not save many carriers from losses in 2008, analysts predict that the moves will help them return to profitability in 2009. A major reason for higher expenses, jet fuel prices, eased in late summer 2008, prompting increased optimism among airline industry analysts.