Sunday, May 09, 2010

The Airlines' Death Spiral

On my recent trip, I was taken aback by what looks like the beginning of the end of air travel. I hadn't traveled by air since last fall, and the vacant gates as my airplane taxied out and in, the boarded-up gates on the interiors, the much smaller numbers of people than I recalled from past trips were quite remarkable.

The airlines are trying to run their planes fuller, so they are using fewer planes, which partly accounts for the vacant gates, and presumably the recession has put a crimp in some trip plans, both business and personal. But I'm wondering if the airlines might not be dying.

Delta has absorbed Northwest, except for a few not-yet-repainted planes wandering around the Minneapolis airport. But they no longer send out e-mail check-in, and the agents themselves had a hard time making the computer check-ins work. My own observation was that they've made the sequence too complicated and non-intuitive. And when the system didn't spit out a baggage tag, the fix took a full five minutes of two agents' time.

But they are providing pretzels, peanuts, and cookies, sometimes even a choice among them, on board, although it seemed to me that the extra inches Delta advertised some years ago have disappeared, and then some.

The New York Times editorial board wonders why the airlines are merging, as do I. I guess it's what you do when your business model is no longer working and you can't come up with another one. The Times editorial lists the usual airline woes: legacy costs and customers who seem to respond only to lower prices.

Has the degree of unpleasantness of air travel, the coffin-like space allowed to each passenger, the surly attendants, the indignities and inanities of TSA scrutiny, finally convinced people that other means of travel, or none at all, is the best plan? Is improved teleconferencing is taking the place of more business travel? I know that I am no longer as eager as I once was to travel because of these things.

The mergers are a sign that airline executives see no reason to rethink their business model. So they offer a service that is not unlike a public utility, neither delighting nor exciting the customer, and then accuse the customer of wanting only lower prices. Perhaps the cycle will end when the old behemoths finally merge into a single airline that dies, with newer airlines coming up. But it's not clear that airlines like Southwest are much more innovative in their business models; they merely take advantage of not having the legacy costs and are more explicit that they offer nothing beyond a utility.


Paul Guinnessy said...

I used to be able to fly to the UK for $300-$500 easily. Now the same trip costs $800-$1200.

That's what has cut back my flying. The reason for the different? The airport tax used to be $60, now its $350. All for the job of taking my shoes off for non-exisitent threats.

It used to be that flying worked out easier too if you had to travel more than 300 miles, but with the amount of time you spend through security and how unpleasant the experience is of being crammed together, I'm sure a lot of people just took the car or train instead.

troutsky said...

I was going to suggest that people may be worried about their carbon footprint but that's absurd.