Airline Profits Up: Passenger Comfort Down

Dear Customer:

We don’t like you.
We don’t care whether you like our product.
We don’t care if you have a good experience with our company.
You are just a profit center for us, a statistic and we’re going to wring every last dollar that we can from you.
If we make you cramped and uncomfortable in the process, too bad.
If you curse us and hate us, that’s okay, too.
We’re going to impose outrageous extra fees on every interaction we have with you.
If you don’t like those fees, that’s also too bad.
Our underpaid employees will look sheepish at best and snarl at you at worst.
We don’t care about that, either.
Now shut up, buy our product, put up with our rotten service and awful attitude.
And we can do this because, really, you have no alternative.
It’s our way or the highway and there’s no highway where you need to go.

The Airline Philosophy

Introducing the exciting new Thromby 900 concept aircraft from Bobus AerospaceThis, in a nutshell is the business philosophy of the U.S. airlines. And they’re right. We have no recourse because they and the oil companies have lobbied to prevent any attempt a high-speed rail—in most cases the only alternative—in this country.

  1. When oil prices were high, the airlines raised prices and levied surtaxes on passengers. When oil prices dropped, prices remained high and the surtaxes did not go away.
  2. They continually cram more and more people in their equipment, making seats narrower, closer together and with thinner seat cushions. Imagine taking a cruise where you had to sit on thin, narrow seats like those in airport “lounges,” all lined up on deck like fish drying in the sun. Want to see how this looks compared to other venues where people come together? Check out “Why Flying is awful, explained using your sad, lonely apartment,” by Christopher Ingraham in the Washington Post.
  3. They imposed baggage fees on our luggage, making us pay through the nose to take our bags with us in the belly of the plane (which is cheap territory) but letting us bring bags of a certain size onto the plane (which is expensive space). This impedes boarding, delays flights, and makes the process frantic and chaotic for everyone.
  4. They increased the fee assessed for changing a flight, even though it takes just a few key strokes from an agent.
  5. They eliminated compassionate fares for people who have suffered a sudden loss and need to get home for a funeral or to deal with an accident.
  6. They canceled flights so that they could put more people onto fewer planes and make sure every flight was full to overflowing.
  7. They scrapped free food, even pretzels, and instead gave us menus of overpriced sandwiches and snacks.
  8. They fired counter agents and replaced them with robotic kiosks.

Airline profits are up, way up. They’re raking in money faster than they can count it. The airline industry profits tripled to $29 billion last year and the four biggest companies hold $18 billion in cash. Wait, that’s a good thing. Maybe now they’ll loosen up a little and give us passengers a break.And they did all those things for a reason: the more uncomfortable, unpleasant, and downright horrific a standard coach-class flight is, the more likely we are to spring for extra “services.” Those are things we used to take for granted as part of the travel experience, the things we had purchased along with our ticket, and now remember fondly.

Gordon Bethune, former CEO of Continental Airlines, is even trying to make those extra fees sound like a good thing because now “passengers can pick what they’re willing to pay for.”  Woo-hoo, what a benefit! It’s not a bug, it’s a feature.

  • Don’t like being crammed into your seat? Pay extra for more leg room.
  • Afraid there won’t be any space left in the overhead bin? Buy early boarding privileges so you can jam your bag in first.
  • Don’t want to put your luggage in the bin? Pay a big, fat luggage fee.
  • Need to get home for a funeral? Cough up a huge, last-minute fare.
  • Have to change a flight at the last minute? Gotcha there, too.

Profits Are Soaring

That’s it in a nutshell. And it’s worked for them. Airline profits are up, way up. They’re raking in money faster than they can count it. Airline industry profits tripled to $29 billion last year and the four biggest companies hold $18 billion in cash. Wait, that’s a good thing. Maybe now they’ll loosen up a little and give us passengers a break.

This is your captain speaking: “Fuggaboutit. NO. Nope. NFW.”

U.S. Airlines Estimated Cash Flow Yield 2015

Source: BoA Merrill Lynch Global Research, U.S Global Investors

If the airlines were to ask (as if!) what we passengers would like to change, we’d all be pretty much in agreement. Unfortunately, the airlines aren’t on board, as Scott McCartney tells us in “How Should Airlines Spend Their Windfall?”  Mr. McCartney says in The Wall Street Journal:

“If it were up to travelers, the money would be spent taking the hassle and strain out of air travel. It could restore some of the comforts that flew away with pillows and blankets. The starters: adequate leg room, lower punitive fees for schedule changes and equitable frequent-flier award availability.”

Yeah! Right!
Nope.

I’m all in favor of higher pay for workers and I’ll take the pretzels. I expect the equipment to be reliable and I don’t care about spiffing up the airport clubs. Just give me a comfortable trip, please. I’ll bring my own lunch.Here’s what they are spending all that money on:

  • Improved reliability
  • Better planes – but with seating just as tight or worse
  • Wi-fi and entertainment
  • Higher pay for workers
  • Free pretzels on some flights
  • Cosmetic upgrades
  • Airport terminal expansions
  • Airport clubs

I’m all in favor of higher pay for workers and I’ll take the pretzels. I expect the equipment to be reliable and I don’t care about cosmetic upgrades or spiffing up the airport clubs. Just give me a comfortable trip, please. I’ll bring my own lunch; I do that now anyway.

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