Airline Travel Is Like A Punch In The Face

Deservingly so, everyone is piling on airline misbehavior these days. Last week a doctor was dragged off a United Airlines plane when he refused to give up his seat on an overbooked flight. It was a media sensation.

Most would agree airline travel is critical to our lives. Millions of people travel by air each year to vacation, see relatives and do business, and they all depend upon affordable, reliable and safe airline service.

The other side of the coin is that airlines are businesses owned by stockholders that want to see their investments increase in value. Every service that airlines provide costs money. So there is a balancing act that airline executives must contend with when they decide how much legroom we have, how many flight attendants will serve us and whether we get anything to eat.

Most current problems emanated from the moment that the airline business converted from a regulated to an unregulated industry. In 1978 the Airline Deregulation Act removed the U.S. Federal Government from control over the airline industry. Prior to this time all airlines were treated like public utilities and all routes, fares and schedules were controlled by a governmental agency. Essentially fares were established to ensure a compensatory rate of return to airlines. In other words they were virtually assured of making a profit.

Some of us remember the days when taking a flight was an enjoyable experience. The flight attendants were cordial and seemed to enjoy their jobs. And they actually had substantive things to do in flight. Of course the primary role of attendants was and still is to ensure our safety. But in the old days they wanted to make us feel comfortable with good service. Today ringing a call button or asking for another drink is a capital offense.

In the 70s most airports in major cities were relatively new and pleasant places to visit before a flight. Airline personnel were very accommodating and anxious to help and ensure that you used the airline again in the future.

Regulation changed everything. The airlines wanted to shed federal oversight because they believed they could increase their profits in a more competitive environment. And the government, as expected, was buffaloed into thinking that the cost of flying would decrease because of greater competition.

A few years after deregulation, reality set in. Aviation fuel costs spiked during the oil embargo in the late 70s. Capital costs for new aircraft skyrocketed with the demand for planes by new airlines. And concern with air and noise pollution necessitated new equipment purchases in an unfavorable financing environment.

The result was that several airlines were forced to declare bankruptcy or merge with other airlines looking for economies of scale. Amenities on new aircraft were cut to save money. Unprofitable routes to remote locations were abandoned. And security costs began to take a toll on both airlines and airports.

Regulation, unbeknownst to the airlines, was a great gift. The stock prices of these companies would never soar, but regulation would always provide a dependable return just like utilities.

Today all bets are off. The airports are uncomfortable places because of growth in the number of travelers, inadequate facilities and terrible ingress and egress into airports. Unfortunately employees of the airlines and the airport always seem to  be unhappy reflecting the stress of this business on them every day of the week. Most of these issues are greatly impacted by the desire of airlines to increase profits.

If profits are the prime motivation for airlines, the obvious thing airlines can do is to maximize the number of seats on each plane. The implication of this is to make customers feel squeezed in and uncomfortable. The more seats filled on a plane, the more money the airline rake in.

Maximizing load factors (percentage of seats filled) occurs when fewer planes are servicing a specific route. Keep in mind empty seats on planes are lost forever. Overbooking helps decrease the number of empty seats on planes because there inevitably are travelers who cancel reservations. Decreasing service results in less schedule flexibility and higher prices, as demand for seats is greater than the supply of seats.

Declining service on planes is a consequence of fewer flight attendants, no meals or snacks in economy class, inedible meals in upper classes and fees for every conceivable aspect of flying. They include baggage fees, snack fees, cancellation fees, flight change fees, etc.

One of the worst decisions by airlines was to charge for checked baggage. The result is far greater carry on activity and delays. Perhaps this was instituted to decrease the number of baggage handlers.

Generally speaking the 9/11 attacks made airplane travel even more irksome. An entire cottage industry of TSA employees came into being. The training, performance and attitude of these people are appalling and have resulted in countless delays and confrontations. The security benefits of the TSA force are frequently questioned. Are they really stopping terrorists and making us safer?

Getting back to the United Airline situation, there is fault on every count. The passenger should not have resorted to a sit-in encouraging the airline to drag him off the plane. Most people would have bitched loudly and sought retribution with the airlines after the fact or spoken with their attorneys. Nevertheless the treatment of this passenger is going to cost United a pretty penny. And it might result in the end of overbooking.

The response by United management was truly sub par. The CEO was ill prepared to speak to the press. His response should have been an apology, firing of all the United personnel who perpetuated the situation and a comment that United’s customers are its most important asset, which they are.

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