It is the best of times, it is the worst of times — best of times for America’s airlines, worst of times for the passengers they are cramming into their airplanes.
The airlines are making money despite delays and horrible service. The reason: After a wave of chastening bankruptcies, they have cut capacity, bringing the number of available seats more into line with demand and reducing the scramble to peddle empty seats at any price above the almost zero cost of carrying an additional passenger.
This past summer, carriers operated at around 86 percent load factors (percent of seats filled), which is good for the carriers, but not so good for travelers wedged into middle seats or hoping to cadge a seat on some frequent-flier program.
The generally tight supply situation is unlikely to change for the next several months, as holiday traffic picks up. Indeed, with the weak dollar making overseas travel eye-wateringly expensive, those Americans not committed tovisiting Grandma in Florida are more likely to find New York and Hawaii more affordable destinations than London and the south of France.
But the cost of overseas travel might, just might, drop in the New Year because effective competition might finally be coming to the trans-Atlantic route. New carriers are already wooing business-class customers on the London-New York route with lower fares.
Even more important is the liberalized regime that will become effective in March, when any European or American airline will be free to fly anywhere between the U.S. and Europe. Delta and Air France have already announced plans to offer 19 flights every day from the U.S. to London and France. Other carriers are sure to enter the fray.
The bad news for passengers is that there seems to be little relief in sight from long lines at check-in desks and at security checkpoints at Washington’s Dulles, London’s Heathrow and other airports around the world.
If lines lengthen at security checkpoints, no one has an incentive to add staff or open more lanes. By contrast, such a situation at Whole Foods, Giant or any respectable supermarket results in the opening of more check-out lines to relieve congestion.
Store managers have an incentive to prevent customers from taking their business elsewhere; airport managers don’t, or think they don’t. Indeed, they have every incentive to keep costs down and profits up, even if that means providing a miserable service.
Imagine what life would be like in an airport in which security personnel, or at least the managers, had their pay cut every time lines lengthened beyond some target limit, and they possessed the power to correct the situation.
Now consider the airlines’ roles in all of this. They have by and large acted as if their customers’ experience in airports is none of their concern.
Yes, some have set up fast-track security lanesfor their best customers, but most have left their passengers at the mercy of a security system in which the operators have little reason to worry about passenger convenience.
All will be well when the passenger tunes into some great in-flight entertainment system. Unless, of course, he or she is sitting on the tarmac for a few hours, in which case the airlines are guessing that their customers are not completely up-to-date on the carriers’ reluctance to fund a new air-traffic control system that might eliminate such annoyances.
On the plus side is the competition between Boeing and Airbus to produce a next-generation aircraft that is more passenger-friendly.
Last week Singapore Airlines put the Airbus A380 into service on the Singapore-Sydney, Australia, route, and promised “to change the way you travel, forever.” Which will certainly be true for those who can afford one of the double-bed, private-shower, flat-screen-television private cabins, which went for $100,000 on the 8-hour inaugural flight.
Less affluent passengers —economy costs $550 — are promised more legroom in all classes of service. Boeing’s entryz, the 787, has hit production delays but should be available some time next year, and will also offer more comfortable seating.
Of course, none of this will matter if America’s airlines keep capacity low enough to enable them to raise fares, lower service standards, refuse to replace their aging fleets, and use the sardine can as a model for the seating configurations of the few new planes they do order.
Gordon Bethune, former chief executive officer of Continental Airlines, once commented on reductions in the quality of service that “You can take so much cheese off the pizza that nobody will eat it.” Perhaps. But for now the skimpy pizza is the only food on offer.
Examiner columnist Irwin Stelzer is a senior fellow and director of the Hudson Institute’s Center for Economic Studies.
