Travel Thursday: Why Flying Is Getting Less Comfortable

This morning, the Economist published a piece on why flying in the summer is so hellish. Their words, not mine, though I agree with that sentiment! As someone who typically flies 45-50 weeks a year, I really dislike flying over summer break and any holiday periods, when airports get congested with infrequent travelers who don’t know the basic rules/etiquette. But, as the Economist points out, there’s more to it than just higher loads: summer thunderstorms cause many delays and cancellations, whose resolution is thwarted by the aforementioned high loads. If one flight is canceled, there isn’t much extra capacity to easily get everyone where they need to be.

And each summer holiday, flying gets even less comfortable than the year before. Carriers continue to shrink seat size and take away amenities – and this year, the new “Basic Economy” fares offer a greatly diminished product in exchange for a dirt cheap price. If you buy a Basic Economy fare at any of the Big 3 domestic carriers (American, Delta, or United), you won’t be able to carry on a bag, select a seat, get an upgrade, earn miles, or even change your flight. People always complain about exorbitant airline change fees, but with Basic Economy you don’t even have the option to pay those – your ticket is use it or lose it. Wish you could just pay $200 now? ;)

Airline_Change_Fee_Vs_Name_Change_Fee

I haven’t verified the validity of this, but I believe it.

The reason these Basic Economy fares came to exist is that the Big 3 need to be able to compete with the no-frills carriers like Spirit and Frontier, who offer a barebones product. (In the airline industry, the “product” is the flying experience.) If travelers are seeing a $69 Spirit fare and a $99 Delta fare but are simply choosing the cheapest option (even though Spirit charges $55 for a carry on), then Delta needs to find a way to compete with that $69 fare. The solution is Basic Economy: offering a $69 product that matches Spirit’s product offering, rather than devaluing the regular $99 Delta experience, like they had been forced to do up until this product / fare class was invented.

There’s a lot of debate over whether the Basic Economy fares are transparent or whether customers are getting tricked into buying a product that doesn’t fit their needs. In my opinion, the Big 3 have done a great job making the restrictions clear on their own websites; the only issues are when people book through a third party like Expedia or Orbitz (and even that seems to be getting resolved). My recommendation? Book directly with the airline rather than through a third party, and double check all the details closely. Don’t assume anything about your experience, particularly if you don’t fly frequently and may not be aware of product / policy changes since the last time you flew.

In general, I think a lot of the frustration with the airline industry is due to people not thoroughly doing their research on what they are buying, and then being upset with the results. When I was working at JetBlue back in 2009 and JetBlue was considering adding a charge for checked bags, I learned about an interesting study done by a consulting firm. At the time, United charged for checking a bag, but JetBlue and Southwest did not. So the consulting firm surveyed flyers to find out how aware they were of these discrepancies… and the results were pretty surprising. Only about half of the flyers polled knew that United charged for checked bags. Meanwhile, Southwest pumped millions of dollars into marketing campaigns advertising that bags fly free – but about a third of flyers polled still thought that Southwest charged for checked bags. And JetBlue fell somewhere in the middle – roughly 40% thought JetBlue charged for checked bags, even though they did not. With the difference only being about 10% in either direction, it made sense for JetBlue to eventually begin charging for checked bags – which they began doing in 2015. And in 2016, JetBlue brought in $231.2 million in checked bag fees! That’s a lot of revenue to give up when such a small percentage of travelers even recognize the product difference.

Extra_Go_Sherpa_Shirt_JetBlue

JetBlue’s other option to boost revenue was the invention of this classy new multipurpose shirt… but it didn’t take off. (Ba dum bum.)

Beyond the recognition of product differentiation, there is also the flyers’ willingness to pay for various products. Allegiant Airlines VP Brian Davis said it best way back in 2009: “There’s clearly a disconnect between some customers’ stated preferences and what actually matters most when they’re sitting down ready to make a purchase.” Sure, we all want free checked bags, roomy seats, delicious in-flight meals, and other perks. But are we willing to pay extra for those things? Most of the time, the answer is no.

When I worked at JetBlue, I thought our product was just amazing, and better than our competitors’. Comfy seats, free checked bags, friendly service, delicious snacks (mmm, Terrablue chips!)… what’s not to love? But as a revenue management analyst who tracked ticket sales day in and day out, I noticed that if I was charging literally one dollar more than the competition for a particular flight, my bookings flatlined. The airline industry is plagued by price sensitivity that’s almost unparalleled, and ticket prices are falling (yes, they’re falling!)… yet people still wonder why service standards are also plummeting. As with most things in life, you get what you pay for. (And here’s an interesting counterpoint arguing that perhaps we’re getting more amenities than we think.)

So before you complain about airline seats getting smaller, Basic Economy fare restrictions, or other in-flight amenities that now carry an upcharge – consider how you’re spending your travel dollars to tell airlines what you want. Are you buying the cheapest ticket no matter what? Millions of flyers are doing just that, and airlines are cutting services left and right to comply with that demand. But where will the race to the bottom end? With consumers getting increasingly vocal, there’s renewed talk of the government mandating a “passenger bill of rights”. Personally, I think this would vastly overstep the bounds of what our government should do.  The real solution is for passengers to start putting their money where their mouths are.

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