Airlines' Increasing Profitability Is A Double-Edged Sword | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

Airborne Unlimited -- Recent Daily Episodes

Episode Date

AMA Drone Report

Airborne-Monday

Airborne-Tuesday

Airborne-Wednesday

Airborne-Thursday

Airborne-Friday

Airborne-Unmanned w/AUVSI

Airborne On ANN

AMA 09.21.17

Airborne 09.18.17

Airborne 09.19.17

Airborne 09.20.17

Airborne 09.21.17

Airborne 09.22.17

Airborne-Unmanned 09.19.17

Airborne-YouTube

AMA 09.21.17

Airborne 09.18.17

Airborne 09.19.17

Airborne 09.20.17

Airborne 09.21.17

Airborne 09.22.17

Airborne-Unmanned 09.19.17

NEW!!! 2017 AirVenture Innovation Preview -- YouTube Presentation / Vimeo Presentation

Mon, Jun 25, 2007

Airlines' Increasing Profitability Is A Double-Edged Sword

Cost-Cutting Measures Paying off, But At What Price?

As US airlines repair damage from years of losses that have arisen from increasing low-fare competition and climbing fuel costs-- not to mention terror concerns -- carriers say they have been forced take actions that improve their bottom lines, but could repel the customers who make that bottom line possible in the first place. 

Or maybe not.

Air Transport Association spokesman David Castelveter says flights will be more than 80 percent full on average this summer as a record 209 million people will travel by air, according to Reuters.

"The carriers' actions are paying off," he said. "They are starting to make money. Their airplanes are full."

Translation: crowded.

Indeed, US carriers made $2 billion to $3 billion in 2006, the industry's first annual profit since 2000, according to the ATA. To do this, carriers have had to fill as many seats as possible and cut costs wherever possible, including sacrifices in customer service. This has translated into such inconveniences as fewer seats to accommodate those grounded by canceled flights. As a result, people can be stranded for days.

"In the old days, when flights were half empty, delays were less stressful," said DePaul University airline expert Joe Schwieterman. "Nowadays delays mean almost intolerable crowding both in airports and on airplanes."

"I faced a five-hour delay at Reagan (National Airport, Washington, DC) last week. It was terrible," he said.

"On one hand, it's good because it puts airlines closer to profitability," said airline consultant Michael Boyd. "On the other hand, it's bad because there is no excess slack in the system."

But, even though travelers face frustration at overcrowded planes and the hassle of delayed flights, afterwards they ultimately care more about price, according to Boyd.  

"It doesn't change the fact that consumers have the attention span of a monkey," Boyd said. "The next time they go to Fort Lauderdale, they are going to book whatever seat is the cheapest."

According to Reuters, experts say carriers' financial health will be best protected by running lean, even if it means incidents of such customer service horrors as hundreds of passengers being stranded because of computer hiccups or bad weather and they are unlikely to lose much business as a result.

According to the ATA, more than half of all delays last year were caused by things out of the airlines' control -- such as weather, and is compounded by the aging, woefully inadequate air traffic system.

But, the air traveling public may, indeed care more about bare-bones ticket prices than any customer service meat. New no-frills airlines, like the Columbus, OH-based Skybus, offer seats as low as $10 and don't have so much as a customer service phone number, as ANN has reported.

So far, Skybus CEO Bill Diffenderffer says, "A couple hundred thousand" tickets have been sold since they became available -- online only, no ticket agents -- on April 24 and more than 80% of the seats on its current 14-plane fleet of leased Airbus A319s were booked through the first month.

You do get what you pay for, though. Ten dollars for airfare means you check your own baggage and have to pay for things like meals and pillows separately -- cash only, please.

FMI: www.airlines.org, www.aviationplanning.com

Advertisement

More News

AMA Drone Report 09.14.17: MultiGP NatÂ’l Championship, GDU O2, ICAO Registration

Also: AMA Monitoring Volunteer Drones, Aerix DaVinci, FAA ReAuthorization, TobyRich, ADR Test Pilots The 2017 MultiGP National Drone Racing Championship are being held now through >[...]

RFP: ANN Seeking New Site/Facility For Major Studio Upgrade

It's Official: Aggressive Upgrades For New Airborne Programs WILL Require New Digs It's been in development for years, but we're getting to a point where we think we can pull off s>[...]

Airborne 09.19.17: Avro Arrow, Virgin Orbit, No Pot Delivery By Drone

Also: NFlightMic Debut, Natl Av Hall Of Fame, Aero-Calendar, MD v FAA, Med Drone Transport, Ryanair, 'Black Sheep' Kraken Sonar Systems, working with OEX Recovery Group, has discov>[...]

Airborne-Unmanned 09.19.17: FAA OKs FL Drone Ops, ICAO Registry?, No Pot Drones

Also: FAA Reauthorization, Medical Drone Transport, USMC Quadcopters, Canister Launched UAS, Atlas Dynamics Airborne, primarily based in Jacksonville, FL is starting to recover fro>[...]

Airborne 09.20.17: Apollo 11 Tour, ADS-B Upgrades, FL Drones

Also: Sebring Airport, DeLand SportAv Showcase, MH-139, Winged-S Rescue Award, Next AF1, EC-130H Update, SDASM HOF The Apollo 11 command module Columbia—the only portion of t>[...]

blog comments powered by Disqus



Advertisement

Advertisement

Podcasts

Advertisement

© 2007 - 2017 Web Development & Design by Pauli Systems, LC