Airlines 2.0: Crowded Planes, Higher Fares
There’s good news for the airline industry. Unfortunately, it means bad news for their customers.
A decade ago, flyers’ carry-on bags weren’t stuffed full of travel-size bottles, airport X-ray machines couldn’t see through your unmentionables, and you didn’t pay to take your luggage on your trip. Perhaps unknown to flyers, the airline industry has also changed dramatically, along with the flying experience. Companies are hoping it means a smoother road ahead, but widespread belt-tightening has already meant more headaches for flyers.
Last year, major U.S. airlines posted their third consecutive year in which they took in more money than they spent, according to a report released this week by the Department of Transportation’s Inspector General. That profitability, however, was hard-won: over much of the last decade, the industry rushed to deal with economic problems. Major carriers’ accumulated losses mounted over much of the last decade, eventually hitting nearly $63 billion in 2009. Revenues outstripped expenses at U.S. carriers as a whole as well, from 2001 to 2004, and again in 2008. That spurred airlines to get leaner. Available seat miles, a standard measure of capacity, have also dropped from a peak of over 744 million domestically in 2007 to 681 million in 2011, according to the Bureau of Transportation Statistics, and total seat miles, including international travel, also declined. Domestic passenger flights also fell by 13.9 percent from 2007 to 2012, according to the DOT report.
“It’s a sea change, and it’s like nothing I’ve seen in 30 years,” says Bob Mann, independent airline industry analyst and former American Airlines senior executive, of the recent shakeups in the airline industry.