US Domestic Air Travel: Flying Clown Cars

It's been awhile since I got fired up about my business travel... Tonight I chose to get a little athletic with my keyboard.

Back last spring,  Delta Airlines emerged from Chapter 11 bankruptcy with forgiven debt, a revised route structure and a vigorous, new competitive strategy. I wrote about how airlines like Southwest should be thinking about revising their competitive and expansion models because Delta, Northwest and other majors had a new lease on life.

To a certain extent that's proven to be true.  Southwest and  JetBlue both have slowed network expansion and given more thought to in flight amenities, entertainment systems, etc. The big guys who got a new lease on life though, have found that the months following court protection haven't exactly been a launching pad to reinvigoration despite initial optimism and marketing rhetoric.

This week Delta announced that its profits for Q4 would be essentially flat due to huge increases in fuel costs.  Further, Delta would withdraw 13 aircraft from the US domestic network in order to deal with fuel economics.    DAL isn't the only one.  American Airlines, the largest carrier in the US, has withdrawn aircraft too. American claims this is due to heavy maintenance, which has caused a temporary network shrinkage that will recover in 2008.

All I know is that I think this is a draconian exercise in yield management. Yield management is the practice of charging the maximum price for every seat on an aircraft based on factors such as how full the flight is, seat availability prior to departure, route competition, time of year, loyalty program status, etc.  It is the reason that you can buy an airline ticket today for a particular flight and be virtually assured that the guy next to you paid something different. Airlines thought this concept up, but shipping lines also practice yield management.   When your product (space on a flight or sailing) is a perishable commodity, when you buy is all part of the mix that generates "yield" on a given slot or seat.

This week I flew from Atlanta to Phoenix. Normally this is a B757 route. The 757 has lots of space with plenty of upgradeable first class seats. I like this route normally.  Not this week.  This week I got B737's in both directions... FULL flights with not a seat unsold.  Good for the airline as smaller airplanes with full loads make for good yields on few available seats.  However, as a business traveler who spends 150 nights a year on the road, this kind of thing is brutal.  I'm whining here, but I had middle seats in both directions with full overhead bins and tight spaces to add to business travel stress.      

I booked my flights for next week today.   Atlanta to Houston on Delta.  My flights will be on CRJ-700 aircraft.   Regional jets suck.   Sorry, but these things have the capacity of a clown car. It's impossible to work on smaller aircraft and the time it takes to get on and off the airplane make travel very inefficient for the passenger.  On a flight from New York to Philadelphia, fine, I can tolerate an RJ.  However, on a 3 hour flight, these things are torture. 

The issue for airline operations is that the newer RJ's have quite a range.   Atlanta to Dallas or Newark to Dallas is fully possible on a Canadair or Embraer Regional Jet.  Any B737 from the -800 model onwards is capable of flying from Boston to San Francisco.   (I've done that one.). For air carriers, matching maximum loads with minimum cost is good business.  However, customer comfort has gone out the window along with pillows,  meals, and "stewardesses".  I guess I'm old school in that regard. 

More and more people are flying these days.  When fuel costs $50.00 for a tank of gas, any distance over 500 miles makes it impractical to drive unless you are taking the family.  For business folks, flying is a requirement.  The problem is that it is less and less enjoyable. Fuel costs have caused the airlines to become flying bus lines with little in the way of amenities.  Security has also been a complete blight on airline performance and in passenger convenience.  I've often thought that the true cost of 9/11, beyond the tragic loss of human life, could be measured in time delays caused by the ubiquitous security scanner.  I am certain this number measures in the billions of dollars.  

Being an Airline CEO has to be the toughest job in America.  Delta's new CEO is Richard Anderson. Anderson has no particular loyalty to the history and legacy of Delta as a southern icon. He is a Northwest Airlines guy.  He'll merge Delta at the first opportunity if the market and the investment bankers force it.  That's already happened once in the last six weeks with rumors of a Delta-United merger.   While the Delta board gives lip service to keeping Delta whole, it will be increasingly hard to do so in the coming months as fuel, competition and nervous bankers continue to act as a crucible.   In the meantime, withdrawn aircraft, increased prices, and fewer amenities are the price that we passengers will pay.

As a transportation and airplane geek though, I have to hope there is a light at the end of the tunnel.  The 767 is phasing out of commercial passenger use in the next few years.  The Boeing 787 and Airbus A350 are in the works. These planes promise increased fuel economy, larger cabins and more amenities.  Airlines are betting their lives on these new planes.  The 787 is already the largest pre-ordered airliner in history with over 700 planes on order. 

Delta is the largest B767 operator in the world and still has an order yet to place for as many as 100 787's. That is...unless DAL decides to wait and merge fleets with another carrier.  If Delta orders new 787's, then that will be the signal that Delta will be around awhile.  If that doesn't happen, then thats a significant clue that Mr. Anderson and the Delta board are looking at other options. The next 3 months should tell.  Lets hope that the new technology will save us from the transitional clown car strategy being employed today.

Eric

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Comments

[Mark in Houston]

Eric -

I totally agree with the idea of regional jets as clown cars. It's about the only way I have to get between Houston and Dayton, unless I want a 6 AM flight on AirTran, which isn't exactly what I would call a real airline. The seats on these things have no cushioning as they are meant for 30-45 minute trips. Try 2-1/2 hours in one. After an hour, my behind is toast. ExpressJet has also, so it seems, deemed blankets and pillows a waste of fuel. I view them as improvised cushions.

Also, the seat backs recline no more than about one inch - an inch and a half if the seat is broken.

And people wonder why I hate flying...

[aircraft for lease]

I think Midwest Airlines is offering a few good fares, with the best deals on shorter hops around its back yard. The longer haul routes aren't anything we haven't seen before. Sale ends Jan 13.