There is no need to tell you that flying these days is a miserable experience. In fact, it’s so miserable that it’s tempting to suspect that the suffering is deliberate — that airlines are making us miserable as part of a calculated strategy to extort more money from us.
Tim Wu has given in to that temptation. In an article at the New Yorker, he argues that everything we hate about modern air travel — the tiny seats, the baggage fees, the exorbitant cost to change flights — is the result of a vast, social-welfare-destroying scheme to make us miserable in order to make us pay the airlines to palliate the suffering they’ve caused us.
A number of people have asked me what I think of this article, so here’s what I think: He nails the effect but lays the blame at the wrong door. The problem isn’t greedy airlines. It’s us.
The economics of the airline industry are daunting; by some accounts, the industry as a whole has never made money. Individual airlines make money, or at least they do in boom years. But overall, it’s a hard business. The capital costs are enormous, while the marginal costs of putting an extra person on a plane are tiny. And seats are rapidly wasting assets: The minute a plane takes off with an unsold seat, the value of that seat plummets to zero.
High-fixed-cost, low-marginal-cost industries are characterized by brutal competition and punishing boom and bust cycles. Which is exactly what we see in the airline industry. Over the last 15 years, the three remaining major airlines — Delta, United and American Airlines — have averaged profit margins of 3 to 8 percent, with periodic dips into deep red. Things aren’t getting more crowded and fees higher because it’s a good way for them to shake a little more off the money tree. Rather, the only way that they can make any money is to schedule more flights, cram more seats into the planes and manage their yield so that the planes fly fuller. The result is unpleasantly reminiscent of cattle walking up the slaughterhouse chute.
But unlike the cattle, we have to claim our own share of the responsibility. Ultimately, the reason airlines cram us into tiny seats and upcharge for everything is that we’re out there on Expedia and Kayak, shopping on exactly one dimension: the price of the flight. To win business, airlines have to deliver the absolute lowest fare. And the way to do that is . . . to cram us into tiny seats and upcharge for everything. If American consumers were willing to pay more for a better experience, they’d deliver it. We’re not, and they don’t.
The upside is that more people can afford to fly more often. The downside is that we’re not very comfortable doing it.
Of course, some air travelers are willing to pay more: business travelers whose employers cover the cost of their flights. As I’ve noted before, this group of people really is worse off in the new world of air travel. In the old days, flights cost more, and businesses had to pay more to fly their employees around, but those employees enjoyed a much better experience. Small wonder that they’re disgruntled. Also small wonder that the New Yorker — whose audience contains a large number of those people — is running articles about their plight. But as I’ve also noted before, “the elites are having their knees scrunched” is not a cause that cries out for all that much sympathy.
This fall, JetBlue airline finally threw in the towel. For years, the company was among the last holdouts in the face of an industry trend toward smaller seats, higher fees, and other forms of unpleasantness. JetBlue distinguished itself by providing decent, fee-free service for everyone, an approach that seemed to be working: passengers liked the airline, and it made a consistent profit. Wall Street analysts, however, accused JetBlue of being “overly brand-conscious and customer-focussed.” In November, the airline, under new management, announced that it would follow United, Delta, and the other major carriers by cramming more seats into economy, shrinking leg room, and charging a range of new fees for things like bags and WiFi.
It seems that the money was just too good to resist. In 2013, the major airlines combined made about $31.5 billion in income from fees, as well as other ancillaries, such as redeeming credit-card points. United pulled in more than $5.7 billion in fees and other ancillary income in 2013, while Delta scored more than $2.5 billion. That’s income derived in large part from services, such as baggage carriage, that were once included in ticket prices. Today, as anyone who travels knows well, you can pay fees ranging from forty dollars to three hundred dollars for things like boarding in a “fast lane,” sitting in slightly better economy-class seats, bringing along the family dog, or sending an unaccompanied minor on a plane. Loyal fliers, or people willing to pay a giant annual fee, can avoid some of these charges; others are unavoidable.
The fees have proved a boon to the U.S. airlines, which will post a projected twenty-billion-dollar profit in 2014. To be fair, airlines are not just profiting because of fee income. Reduced competition, thanks to mergers, helps. There is also the plummet in the price of oil, which the airlines seem to have collectively agreed is no reason to reduce fares or even remove “fuel surcharges.” But for the past decade it is fees that have been the fastest-growing source of income for the main airlines, having increased by twelve hundred per cent since 2007.
If fees are great for airlines, what about for us? Does it make any difference if an airline collects its cash in fees as opposed to through ticket sales? The airlines, and some economists, argue that the rise of the fee model is good for travellers. You only pay for what you want, and you can therefore save money if you, for instance, don’t mind sitting in middle seats in the back, waiting in line to board, or bringing your own food. That’s why American Airlines calls its fees program “Your Choice” and suggests that it makes the “travel experience even more convenient, cost-effective, flexible and personalized.”
But the fee model comes with systematic costs that are not immediately obvious. Here’s the thing: in order for fees to work, there needs be something worth paying to avoid. That necessitates, at some level, a strategy that can be described as “calculated misery.” Basic service, without fees, must be sufficiently degraded in order to make people want to pay to escape it. And that’s where the suffering begins.
The necessity of degrading basic service provides a partial explanation for the fact that, in the past decade, the major airlines have done what they can to make flying basic economy, particularly on longer flights, an intolerable experience. For one thing, as the Wall Street Journal has documented, airlines have crammed more seats into the basic economy section of the airplane, even on long-haul flights. The seats, meanwhile, have gotten smaller—they are narrower and set closer together. Bill McGee, a contributing editor to Consumer Reports who worked in the airline industry for many years, studied seat sizes and summarized his findings this way: “The roomiest economy seats you can book on the nation’s four largest airlines are narrower than the tightest economy seats offered in the 1990s.”
Boarding for non-élite flyers has also become a miserable experience. There are far more efficient ways to load planes than the current back-to-front method, which is actually slower than random boarding. The process takes longer still thanks to the practice of letting flyers with status board out of turn and thanks to luggage charges, which compel fee-avoiders to cram their bags into overhead compartments. Airlines lack a real incentive to fundamentally improve boarding for everyone—by, for example, investing in methods such as filling both ends of an airplane at once. It would make life better and also defeat the status racket.
Fee models also lead most people to spend unwarranted time and energy calculating, agonizing, and repacking in the hope of avoiding paying more. The various fees make prices hard to compare, as a ticket can now represent just a fraction of the total expense. These are real costs, and they are compounded by ticketing practices, which demand perfect timing. When customers miscalculate their schedules or their plans change, the airline is ready with its punishment: the notorious two-hundred-dollar rebooking and change fee. Those change fees are particularly lucrative: in 2014, Delta and United are projected to collect nearly a billion dollars each. And the greater social cost comes from those who didn’t change their tickets even though they wanted to.
The fee model isn’t the only reason air travel has become more miserable in recent years. Airlines also benefit directly by throwing more seats into economy, because they have more to sell. But as mergers reduce competition airlines can more safely collude to provide poorer levels of service, and everything that adds to and increases differential experiences drives fee income, which is the most lucrative side of the business. Perhaps that’s why Delta’s new cabin plan offers five different classes of service, and why one unnamed major airline is reportedly considering introducing a level called “economy minus,” with even smaller seats than basic economy.
The various costs described here will not appear on any bottom line but can be easily witnessed in angry families, exhausted flight attendants, and the general sense of defeat emanating from passengers exiting coach. At best, it can be said that more people are able to fly for less; but, as JetBlue demonstrated, there need not be so much misery along the way. Ultimately, the fee models and the distinctions they draw make class inequality, which may be felt less in other places, painfully obvious. The conditions of carriage may lack the importance of other, more pressing social issues. But when an airline like JetBlue is punished for merely trying to treat all of its passengers decently, something isn’t right.
On April 7, 1994, a FedEx airplane — a DC-10 like — took off from Memphis, Tennessee with a cargo full of electronics. It did not make it to San Jose, California, its intended destination. It did, however, become one of the first large cargo planes (and perhaps the only one) to fly upside down.
And not only did the pilot avoid reprimand for the maneuver, he was honored for it.
It started with a suicide plot — one designed to avoid being called a suicide. In general, beneficiaries of a life insurance policy will not collect upon a policy if the insured person commits suicide. The reasons for this make sense but it is a story for another day (and probably a different publication), so suffice it to say that then-42-year old FedEx flight engineer Auburn Calloway knew about this restriction. He also knew that FedEx’s life insurance policy would pay his family $2.5 million if he were to die in an on-the-job accident. And importantly, he was a FedEx employee who was likely about to be fired, and sadly believed that the best way to care for his family would be to get that $2.5 million, even if it meant taking his own life and the lives of others. His plan was to board a FedEx plane, hijack it, kill everyone on board (ultimately, including himself), all while crashing the plane somewhere.
On that April day, he set his plan into motion. As a FedEx employee who served on flight crews, he was able to board the plane for free and without inviting any undue attention to himself. (It’s very common for airlines and couriers to transport their staff around the country in this manner, a practice called “deadheading,” if for no other reason than to make sure personnel get home or to their next departure destination.) He carried with him a guitar case full of hammers, which he intended to use to bludgeon the three-man crew to death, and a spear gun, in case that didn’t work. Twenty minutes into the flight, Calloway entered the cockpit, hammers in hand, and began his assault. He managed to significantly injure all three members of the flight crew before any could react, and cracked the skulls of both the first officer, James Tucker, and the flight engineer, Andrew Peterson.
But he didn’t manage to kill or incapacitate them. Peterson and the captain, David Sanders, struck back at Calloway, wrestling him to the cockpit floor. All the while, Tucker took the controls to, figuratively, put the pedal to the metal and literally, take the plane for a spin. He pushed the plane to speeds approaching the sound barrier — probably in the realm of 600 miles per hour (or about Mach 0.8), which is the top speed possible by a DC-10.
And then Tucker flipped the plane upside down.
Tucker took the plane into a barrel roll while traveling 400 miles per hour — something a DC-10 is hardly designed to handle. In doing so, though, Tucker made it incredibly difficult for Calloway to cause any further harm to the flight crew, as internal cockpit conditions began fluctuating wildly. As the Cockpit Voice Recorder Database (which has a copy of the understandably PG-13 flight recorder transcript) states:
[T]he three struggling men were tossed about the galley area, alternately weightless and pressed upon by three times their weight in G forces. By now, the aircraft was inverted at 19,700 feet, and the alarmed air traffic controllers in Memphis were desperately calling for Flight 705.
Tucker initiated a series of wild maneuvers. He knew he had to keep the craft’s motion unpredictable, or Calloway would simply wait for the roll to end then resume his attack. Tucker abruptly threw the yoke forward, and sent the plane into a vertical dive. He realized then that the throttle controls, located to his right, were pressed forward to their stops; he could not reach them with his limp right hand. The diving DC-10 accelerated past 500 miles per hour, then past the instruments’ capacity to register. Flight 705 was now traveling faster than any DC-10 had ever gone, and was undergoing velocity stresses that the airframe could not sustain. Somehow, Tucker pulled from the dive, then reached across the yoke with his left hand to cut speed.
The plane landed with all four men alive and the plane, miraculously, intact. Calloway was convicted of air piracy and sentenced to life in prison. The flight crew were honored for their bravery by the Air Line Pilots Association, which awarded them the highest accolade given to civilian pilots. Unfortunately, these honors were among the final steps of these aviators’ careers. Due to the their injuries, none of the them were ever cleared to work a commercial flight again.
The plane itself is still in service.