Reviews | Why the airline industry is still down

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Bill Saporito is the editor of Inc. magazine.

Prosperity perplexes the airline industry. And upsetting for the passengers. This summer, the Americans invaded the airports as if it were the evacuation of Saigon. Cancellations are spurred by climate change and our frustrations are growing.

You might think that this misery is related to the industry returning to normal levels of indifferent service. But we are not maintaining pre-pandemic flight levels. National airlines are on track to have 150 million boardings behind 2019 this year, according to an estimate. That’s a lot of people going nowhere.

And yet, we pay more to get there. Delta just said it expects revenue in its September 2022 quarter to top the same period in 2019 despite a reduction of ability from 15% to 17%. Yields, which is the industry term for profit per seat mile, are increasing. The same goes for passenger complaints to the Federal Aviation Administration, which earlier this year were 200% higher than pre-pandemic levels, exceeding the agency’s ability to process them.

In the midst of this mess, the low-cost airline JetBlue is spending $3.8 billion to buy ultra low cost carrier Spirit Airlines. It is money that will not be invested in the product. These are two carriers that have demonstrated a lack of schedule-keeping ability. Putting two clown cars together simply lengthens the circus parade.

Airlines companies have issued their standard apology for our seething summer – but during the pandemic the industry had the opportunity to restructure, using some of the $50 billion in taxpayers’ money that 10 airlines got from Uncle Sam. had decisions to make about what jets they fly, where they fly (or not), which employees they keep (or not), and what fees they charge. Rethinking this could have changed our experience for the better.

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What the airlines chose to do instead largely benefited the airlines. These choices help explain why more than 2,800 flights were canceled over Memorial Day weekend. “The traveling public expects a good level of service from an air sector which we have all mobilized to ensure that it was saved”, Noted Transportation Secretary Pete Buttigieg. Although Buttigieg did some name-calling and made some minor rules, he didn’t do much in the abysmal serve.

And things could get worse. A shortage of pilots could further reduce flight schedules, leaving even fewer options. North America is projected be short of more than 12,000 pilots by the end of this year. It’s no surprise: the industry knew for almost a decade, when 1,500 hours became the minimum federal requirement to sit in the pilot’s chair, that it needed to train more people to fly planes.

During the pandemic, the workforce had been significantly reduced, largely through voluntary retirements. Almost a fifth of Delta Air Lines’ workforce retired during the pandemic, and this year the company frantically hired to restore service.

Even improvements come with caveats. If you love new jets, this is your summer to fly. In 2019, the sky was a flying dump as carriers delayed scrapping their oldest and most inefficient planes because business was doing too well. The pandemic has caused a rush to retire, with hundreds of 25 to 30-year-old jets sent to the graveyard to be replaced by new models such as the Airbus A200 and Boeing 737 Max.

However, new and bigger jets do not mean more room for us. Allegiant’s new 186-seat A320neo, for example, replaces a 177-seater version. These new jets are more about making the economy more comfortable, not you. Conversely, many 50-seat commuter planes have been retired because they are unprofitable or there is no one to fly them. Therefore, many smaller markets have lost air service.

In most mainstream companies, innovation normally improves the lives of customers. In the airline industry, innovation often means something else. A dozen years ago, carriers introduced “unbundling” – the concept of charges for each amenity which, in effect, reduces the base price of the seat while generating offsetting revenue for window seats, l space for legs or bags. But unbundling has reached absurd levels, with so many options for security line and boarding order priorities, seat locations and luggage compartment access that pricing has become a parlor game. , wrapped in a puzzle, disguised as a prank.

The worst part about flying is what hasn’t changed: your flight from New York to Chicago is still scheduled at 2 hours and 45 minutes when the actual flight time is two hours, as the industry still expects for things to go wrong. And yet, because carriers invest little in rescue aircraft, the entire system can spiral into cascading mayhem with a single weather event.

Why do airlines persist in adopting a business model designed to deceive? Because they have little incentive to change. North American carriers should do a combination $8.8 billion in profits this year, according to the International Air Transport Association.

Taxpayers paid $50 billion during the pandemic to keep airlines afloat. We thought we were going to get an upgrade. Maybe we should ask for a refund.

About Mildred B.

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