Posted by: distributorcap | April 22, 2010

Fly the Friendly Skies

It hasn’t been a very good decade for the airline industry. Then again it hasn’t been a very good century for the airlines either. Little did Orville and Wilbur realize that when they took the air in Kitty Hawk on December 17, 1903 that a scant century later flight attendants would be sliding passenger credits card through a charge machine to pay for pretzels.

Prior to 1978, the airline industry was heavily regulated by the US government. The Civil Aeronautics Board (CAB) had the power to regulate the business areas of fares, airport slots, schedules, routes, and the entry of new carriers. When President Jimmy Carter signed the Airline Deregulation Act of 1978, many of these controls were removed. The airlines were basically free to fly as they wish (from a business point of view – the FAA and Dept of Transportation still retained control over safety and other areas).

Since 1978 such familiar corporate names as Eastern, Pan Am, TWA, National, Northwest, PSA, Frontier and upstarts like People Express have disappeared (through mergers, buyouts or bankruptcies). It probably is not a day at Disneyworld to be a CEO at Continental or Delta.

In the interest of raising their revenues (and cutting their costs) the airlines have either stopped providing services that were once included in the price of a ticket or have began to charge for those very services. In a way you cannot blame them. The costs of running an airline have soared (so to speak) due to increased security, higher fuel prices, increased insurance premiums, legacy contracts, and some severe competition.

Gone (or relegated to first class) are “gourmet meals,” blankets, free drinks and a host of other things. Some airlines still serve basic meals and drinks on longer or overseas flights. Most people would probably say it is not much of an issue to get rid of food and drink – after all Greyhound, Amtrak and the NYC Subway do not give sandwiches and sodas away for free. But it seems the airlines are running out of things to take away or charge for.

Ryanair (a discount airline in Europe) is considering a fee for bathroom use. American Airlines will stop giving free blankets and pillows. Most charge for food. Almost all the airlines charge for checked luggage. That move pushed more and more people to lug more and more carry-on bags onto the plane with them, after all it was the one thing that remained “free” (besides the oxygen mask that falls out of the overhead – who knows they may charge for that soon).

Just last week Spirit Airways stated they will begin charging for your carry-on. This of course woke up Senator Chuck Schumer, who decided getting involved with luggage was a lot safer for him than getting involved with Wall Street regulation.

Due to all the security and limitations for carry-ons, lugging bags have become a real hassle. But in reality, how many people travel without any luggage? It is getting so that it is more convenient and cheaper to ship your clothing via Fed Ex or UPS rather than bring it along with you. Some of these a la carte charges (which really do contribute to the bottom line of an industry drowning in red ink) are getting to be a bit crazy. Soon you will see supermarkets charging for their carts or shoe stores charging for using the shoe horn.

What I cannot figure out is why the airlines began charging for checked bags, instead of the carry-ons? Ever since fees for the checked luggage were instituted, it seems that the amount of carry-on bags crammed into the cabin has crept upwards. People stuffing their crap into the overhead bins (and everyone who has been a plane recently will attest to the fact that most people bring bags that fit like a square peg in a round hole) takes up a lot of time boarding and disembarking. Everyone tries to get on early to get a free bin. Half the people cannot reach the slots, and most of the bags are too heavy for little old ladies to lift into the overheads. And it is dangerous. People have gotten hit by falling computers and tennis rackets.

Pocketbooks, computers, and other assorted junk is now being pushed under the seats. A typical plane ride looks more like a flea market than a “classy” mode of transportation.

It seems to me it would make more sense to charge for the carry-ons and give a free ride to one or two bags that are checked in. That would give incentive for people (always looking to save a buck) to the check instead of lug. I don’t think you need a Harvard MBA to figure out a profitable model for doing this. You could allow one small carry-on say the size of a computer and up to 10 lbs (for medicines, books, computers, baby needs etc.). Else the rest is checked. End of discussion. That would surely making seating and deplaning much simpler and quicker. And safer. This isn’t rocket science. This isn’t even aeronautical engineering. It is pure economics. And common sense.

Or – you don’t like that one – how about building the price of baggage into the ticket ahead of time instead of instituting extra charges. If you show up without any bags (or less bags or bags that weigh under a certain amount) you are given a (transferable) credit voucher towards a future flight. That way people don’t get pissed off with all the extra charges and the airlines get all their money upfront. Like gift cards, I bet 30% of all airline credit vouchers would end up going unused. This would make life simpler for passengers (you know what you are paying for and don’t have a lot of surprise fees) and for the airlines. But what do any of us know, we are only the heifers and bulls in the cattle car of life.

I actually, kind of feel bad for the airlines. From volcanoes to terrorism, from rude passengers to screaming babies – this is no way to run an airline. They are in a no-win, no-profit, no pleasing the customer situation.

And while we are on the economics of airlines – they can keep their lousy coffee. Most airlines don’t bother to carry half-an-half, only milk.

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Responses

  1. Brilliant analysis and great ideas. And anytime you can blame Jimmy Carter, its not all bad!Btw, anybody remember the NY Air shuttle to DC and Boston and their "Flying Nosh"?

  2. Cappy They could always cut pay for the pilots down to a Walmart checker.Oh crap they did already..Never mind..;)

  3. Some of the best food I've ever had was on the original Frontier.

  4. those are both great ideas! if only this could happen!! travel would become a joy again, instead of a curse!!

  5. i've been saying for years that people would be better off mailing their luggage to their destination and then back home again when they travel. it would save time at check-in, you won't have to wait for your luggage when you arrive. some enterprising person is going to figure out that he can make money flying luggage around cheaper than people can mail them and cheaper than the airlines will charge for them and start a new business.

  6. I remember that as a kid flying was one of the best parts of a vacation. Not any more. I dread the idea of flying. And I'm not afraid of flying. I'm afraid of how angry I will get if I am randomly chosen to go through a virtual stripsearch–treating me like a fucking criminal–to be a pawn in security theater. Congrats US government, you made travel a dirty fucking word.

  7. My understanding is that the airlines, in their current "deregulated", merged, dumbed-down form, can only be profitable if the price of oil remains under US$75/barrel. Once in climbs over that figure, they sink into the red. Oil has sat at $80-88 range for the last 9 months. It's expected to go higher, perhaps going over $100/barrel next year. And the long term prospect for oil prices are not good. Like every other major business in this country, the airlines are a cozy oligopoly. The start up costs are too high for any real competition at this stage. So they just sit there and, more or less, try to match each other on ticket price and services. No one wants to make the first move to raise ticket prices because they'll lose market share. So they give an artificially low ticket price and then charge these crazy fees. It's all a test to see which return the most in income yet don't cause consumers to flock elsewhere.

  8. I love your idea of charging for carry on but letting checked bags in free. People are starting to attach a handle on the box their new washing machine came in and calling it carry on!

  9. I can see airlines having to nickel and dime us to death, but what I can't stand are Nazi airline stewardesses who've used 911 as an excuse to be petty little tyrants to passengers.I recall once when I was stranded at the Las Vegas airport at 2 a.m. waiting for the 10 p.m. return flight I booked to San Antonio to materialize.It was late, we all were tired, hungover and needing to get back to work in the morning.When the damn plane finally showed up, as we stood in line to get boarding passes, one woman had the temerity to complain aloud about the 4 hour wait.The stewardess overheard her and yelled in a menacing voice, "Lady, if you don't quit whining, I'll see to it you don't get to board the plane."So we all had to stand there like good little lambs and not make another peep.When we finally landed in San Antonio, I asked the stewardess bitch her name and let her know I'd be calling corporate and reporting her as soon as I got to my house.She glared at me and said, "Go ahead."I miss the good old, pre 911 days when you could punch a lippy stewardess and not have to do time in a federal pen.:/

  10. the above deletion is of course slappz – it is nice having a smart phone now where i can delete almost immediately. the moment i see a comment from him, it is gone – it used to read them just to see what he had to say – now i dont even bother, because it is always irrelevant and probably racist.

  11. Hey! Just a head's up United Airlines serves Starbucks coffee & 1/2 & 1/2. They cram people into planes like sardines. I remember hitting some turbulence & the pilot turning on that annoying bell, flashing the seatbets on light. If you are 6 foot tall & large boned, there is no way you can fall out of the seat- your knees firmly pressed into the seat in front of you.

  12. Those are some good ideas, DC.Ryanair (a discount airline in Europe) is considering a fee for bathroom use.That's going too far. Somebody's going to wizzle in the aisle to avoid the fee.


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