15 predictions for business travel in 2008

— -- Business travelers will remember 2007 as a year of brutal flight delays, crowded airplanes and higher prices. 2008 promises to be even worse.

Several fare hikes and strong travel demand helped the U.S. airline industry finish the year with a profit and all major airlines now out of bankruptcy for the first time in seven years according to the International Air Transport Association (IATA). But IATA also believes that rising oil prices and a softening U.S. economy amid declining home values and eroding consumer confidence will cause airline profits to plummet again this year. Airlines shelled out $135 billion for fuel in 2007 and IATA's projected $78 per barrel oil price in the coming year will add another $14 billion to airline operating costs.

With $190 billion in debt still on their books, the airline industry will soon be in financial trouble again and their degenerating condition will have a profound effect on business travel in 2008. Here are my predictions for the coming year:

1. They used to fly here

Sharply higher oil prices and the softening U.S. economy will slow travel demand in 2008. Most major U.S. airlines are already reducing capacity on domestic flights and business travelers will most likely see more service cuts in the year ahead (RELATED STORY:Airlines cut U.S. schedules despite strong demand). Southwest is the only major airline hedged against $100-per-barrel oil at $51 per barrel for 70% of its projected fuel consumption in 2008. Other U.S. airlines unprotected from the oil price run-up will simply reduce frequency or eliminate unprofitable routes altogether and ground airplanes to avoid an unprofitable year (RELATED STORY:United may ground planes as fuel costs rise).

2. Late again

With more than one in four flights arriving late, 2007's airline on-time performance was the second worst since the FAA starting reporting on delays. With no significant plans to fix the infrastructure in the coming year this will only get worse. Capacity reductions on less heavily traveled routes or during off-peak hours are unlikely to provide much relief at the nation's most congested airports.

3. Standing room only

Airline load factors are already at record levels and empty seats are a rare commodity. Capacity cuts in 2008 will only worsen this situation.

4. That airplane may be older than you

1,041 new airplanes were delivered last year and 1,281 more will roll off the assembly line in 2008, but few of them will enter service on domestic U.S. flights. Most large U.S. carriers have deferred upgrading and replacing their fleets for a better day (RELATED STORY:U.S. Airlines Put Off Buying New Planes). The U.S. fleet is rapidly aging, with 35% of airliners now over 25 years of age according to IATA. Older airplanes with more frequent maintenance problems feed further flight delays and cancellations. Older airplanes are also less fuel efficient than newer models and these added costs will be eventually be passed along to passengers.