I started this post while sitting in JFK, waiting for my Jet Blue flight to Boston to take off. My ticket was for a standard leg-room seat, having passed up the opportunity to pay an extra $10 for the longer version. Maybe if I were 6'2" I could justify it, but....
On the flight down, they warned us that, come June 1, we 'd have to pay for the headphones. I don't usually listen/watch on short flights - I tend to doze - but I grabbed a pair and threw them in my briefcase. They might come in handy on future JB flights, and I'll be saving the buck they'll be charging in the future.
Jet Blue is part of an overall airline trend to charge for what used to be standard, and which we will now come to regard as extras - things like blankets and pillows will be bygones. Want a window seat? Ka-ching.
The costs have also gone up for checked baggage.
As I waited in line at Jet Blue to see if I could switch to an earlier flight - which I did by opting for stand-by, rather than paying the hundred bucks they were looking for to guarantee me a seat on the 3:55 - there four young women, clearly fashionistas, lugging wheeled suitcases that were the size of Mrs. Astor's steamer trunks. They were all complaining about how much they were going to have to pay for their overloads.
It seems only fair to charge extra for that sort of excess, but where will the break-out charges end?
Should we be gearing ourselves up for the prospect of a coin slot on the toilets?
This post was actually prompted by an article in The Boston Globe last week that described some of the unbundling practices airlines are instituting at an accelerating rate - practices that will make us hunger for the days when the only thing we had to pay for was the semi-edible inflight meal. Let alone for the days when we got those semi-edible meals for free. Let alone for those way-back days when even the steerage passengers were served with real china, silver, and linen.
The unbundling approach apparently didn't work out for SkyBus, which recently went out of business. But they were offering some really rock-bottom prices, and flying between second- and third tier locations. No wonder they couldn't make a buck.
The SkyBus experience, of course, will not stop airlines from trying to institute "fee based" flying. Especially with industry analysts offering support through priceless comments like this one:
"Ultimately, they [the traveler] will be more satisfied because they will be in control of their travel experience," said Henry Harteveldt, principal airline analyst for Forrester Research Inc.
OK, I'll now be empowered to decide whether it's worth paying for a blanket, or whether I should just always remember to bring a sweater and scarf with me. But tell me again how having "control" over whether I have a pillow - or paying for an aisle seat and letting the cheap-o traveler suffer the middle seat - is giving me control. Let's face it, us flyers are essentially at the mercy of weather; delays caused by FAA rules that dictate that the pilots need a longer rest; and whatever else the airline throws our way. And what control do I have over the fact that, once I'm strapped in, I'm miles high in an aluminum tube sitting on thousands of gallons of jet fuel. And, oh, yes, unlike on a train, I can't pull the emergency break and jump off. Or make myself such an annoyance that the bus driver is willing to let me off in the middle of nowhere.
Control when you're flying?
Not unless you're in the captain's seat. (Even then, so much is automated....)
All this talk of unbundling gets me thinking about why it is that so much of the airline industry can't manage to run itself like a real business.
I worked for several companies that couldn't quite figure out how to make sure that our revenues over time averaged out to be at least a dollar over our costs. All those companies ran out of runway. We got acquired. We went bankrupt. We disappeared off the face of the earth.
Of course, this has happened to plenty of airlines. Just ticking off the airlines that have disappeared in my lifetime would take a while, even if I limited myself to ones I actually ever flew on: Eastern, PanAm, TWA, People's Air, Apple (or was that the same as People's Air?), Republic...
But the fact that so many airlines manage to rack up colossal losses year in, year out and still somehow manage to stay in business, makes me ask this question:
Why don't they charge enough to cover their costs?
Isn't this what airlines used to do?
Sure, only rich folks and business travelers flew in those days.
But show me where the Founding Fathers wrote that we have the right to cheap airfares to Cozumel and Orlando.
If I look at some of my most recent flights, I went to Florida and Texas for a couple hundred dollars by ordering my tickets well in advance and/or flying on a lower-priced carrier.
If I'd had to pay $1000 for either of those tickets, I'd have more than likely stayed home, missing nice visits with my cousins in Florida, and my in-laws and college roommate in Texas.
So?
If the actual cost of those seats was $1000, shouldn't I have paid that much?
I know, I know. The marginal cost of an additional flyer, once fixed costs are met, is low.
But we can't all be that marginal flyer, can we? (For those of you paying full fare and subsidizing me, thank you!) Eventually, if all the airlines have is flyers paying at the margin, they will go bust.
Two recent flights to NYC also illustrate the peculiarities of flying.
A couple of months ago, I used frequent flyer miles to go to LaGuardia on US Air, which seemed to make a lot more sense than paying $700. But last week, it made more sense pay a bit over $200 to fly the via Jet Blue to the generally less convenient JFK. I could have taken the train for a little less, or the bus (ugh!) for a lot less. But $200-ish seemed reasonable.
But if there are well-heeled travelers, or those on what-the-hell corporate expense plans (i.e., the company's paying), who want to pay $700 to fly from Boston to NY. And USAir can make money on this route, at these rates, have at it.
If I think about unbundling, my guess is that it can and will go only a small part of the way towards what's needed for the airlines to become profitable. It sort of reminds me of my gloomy days at Wang, made gloomier when the facilities folks removed half of the lightbulbs to save on electricity. That wasn't quite enough to save Wang from its inevitable fate.
Presumably, the same fate is in store for any airline that, in the long run, can't figure out some way - through operational efficiency and/or raising prices - to at least break even.
Paying extra for a pillow?
This may yield a marginal increase in revenues. It certainly has a bit of symbolic "show" rigor to it.
But I suspect that unless they solve their bigger problems, this approach to solvency ain't going to work.
3 comments:
Skybus did not fail as a result of the economy or high oil prices. Skybus failed as a result of poor management at the top. It hired Bill Diffenderfer with no airlines operations experience and the COO Ken Gile a former chief pilot for Southwest had no ground operations experience. Diffenderfer hired other incompetents. The outsourced ground operations were a disaster. Planes were damaged frequently by the ground crews and taken out of service for repairs to the holes gouged into the aircraft by the mishandled equipment. It had the worst on time record because the incometents at the top Diffendefer and Gile did not know how to schedule the flights. Skybus announced new flights and cities and then cancelled them after selling tickets months in advance. Sometimes new flights were announced and cancelled before the first flight took off. As a result of all these failures of executive managment, advance bookings dropped from near 80% to under 40%. No, it was not the economy or high fuel, it was Diffenderfer and Gile who will likely go down as the most incompetent executives to ever run an airline in history. Just look at Ryanair and Allegiant Airlines. These airlines run on the same model as Skybus and they are the most profitable airlines in the world today.
I'd love to see the airline income statements. "And here's the line item, "pillow rental revenues. Note that we're on target to meet our objective of $250M this year."
Right.
So, do they also dig in the seat cushions for spare change? ;-)
I have only flown twice in my life, once on Delta, once on British Airways, and I thought it was pretty good. However, both of those flights happened 3 years ago, and I doubt I'd have the same experience today.
This is why I highly advocate taking the train. I wish Amtrak had the funding to build more Acela tracks and trains; it's a great experience and you get great seats, plenty of legroom, bigger restrooms, and the ability to actually walk around.
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