It's great to see all the legacy carriers finally opening up their JS’s at a time when overall industry capacity is shrinking. [FONT="]A lot of good this does if there’s no seat available![/FONT]
Too bad I couldn’t get a ride home in that empty UAL 757 back in 1999 because another JSer had already arrived at the gate after I’d just given a ride to 5 UAL pilots in my spacious 19 seat J32.
I’m not blaming the pilots…I know it’s a management decision. Just saying it’s frustrating because the airline I was with at the time had an open JS policy for many years.
“Walloped by more than $30 billion in losses since the 2001 terror attacks, airlines cut more labor costs, eliminated more unprofitable routes and reduced more capacity this year.”
Airlines Cram More Fliers Into Fewer Seats, Flights
By Barbara De Lollis and Barbara Hansen
USA Today
12/11/05 5:00 AM PT
U.S. airlines have lost US$32.3 billion in the last four years and are expected to lose $10 billion more this year. Top executives such as American CEO Gerard Arpey have long argued that excess flying capacity needs to be trimmed if the industry is to regain its financial health.
One out of every 20 seats that U.S. airlines flew last December is gone. That's 126,000 seats per day. That means more crowded flights, less service and (maybe) profit.
For the first time in recent aviation history, the financially troubled U.S. airline industry is shrinking domestic flying capacity in the face of strongly growing public demand for its service.
If the capacity reduction is the beginning of a long-term trend toward less domestic flying -- and it's not certain that it is -- the implications could be profound. For consumers, diminished capacity could mean higher average fares, fewer choices, fuller flights and fruitless searches for mileage upgrades and award travel. For communities, it could mean deteriorating or disappearing air service. For the airlines themselves, it could mean a fighting chance to regain profitability.
Cutting Back
A USA Today analysis shows that the number of scheduled domestic airline seats this month will fall 5 percent below last year. It means that 3.9 million airline seats offered for sale last December aren't there this year. That's an average of 126,000 seats per day. It's as if Fort Worth, Texas-based American Airlines, the world's largest carrier, and its feeder airlines had lopped off about 40 percent of their domestic airline seats in the last year.
Meanwhile, the number of air travelers has been growing strongly since the collapse of the travel industry after the Sept. 11 attacks. The FAA projects 19 percent more domestic air passengers in 2006 than traveled in 2002.
Frequent-flier Kevin Kruke of Park City, Utah, says he's been feeling the pinch of more travelers chasing fewer seats. He believes airline capacity cutbacks are rippling back into airports. "Fewer flights are putting more people in terminals at the same time. Lines are longer for Starbucks food, shoeshines," he says.
For some carriers, the cutbacks are "a matter of survival," says John Heimlich, economist for the Air Transport Association, the airlines' main trade association. Capacity reduction cuts expenses and improves airlines' pricing power by constricting the supply of airline seats.
Heavy Losses Take Toll
US. airlines have lost US$32.3 billion in the last four years and are expected to lose $10 billion more this year. Top executives such as American CEO Gerard Arpey have long argued that excess flying capacity needs to be trimmed if the industry is to regain its financial health. Airline executives often make such arguments when talking about the demise of the weakest players within the industry.
Different dynamics explain the capacity reduction measured by the USA Today analysis of OAG (formerly Official Airline Guides) flight schedule data from Back Aviation Solutions. What's behind the reduction:
- Strategy. In the last year, some big traditional airlines such as United and Delta have been shifting more of their capacity to international flying. Those routes command higher fares and help the beleaguered carriers escape fierce domestic competition from low-cost competitors.
- Bankruptcies. To cut costs in bankruptcy reorganization, airlines such as Delta and Northwest have trimmed their fleets. Discounters Independence Air and ATA, also in bankruptcy reorganization, have also jettisoned planes.
- Fuel costs. The run-up in jet fuel prices after Hurricane Katrina accelerated the capacity reduction by forcing airline executives to examine the cost effectiveness of many of their routes. Costly fuel erased profit on many routes, prompting cuts.
Even profitable discounter JetBlue made fuel-related cuts. It eliminated two round trips a week between its New York John F. Kennedy base and Buffalo, N.Y., Tampa, Fla., Fort Lauderdale, Fla. and Fort Myers, Fla.
Industry analysis shows clear trends that are affecting how and when Americans travel this holiday season:
- Frequency of service. Most of the reductions came by scaling back the volume of service on routes rather than by eliminating them.
For example, Delta reduced the number of daily non-stop flights from Atlanta to Philadelphia to eight from 15. Delta's Atlanta-Dallas/Fort Worth service saw a similar cut. Northwest now flies one rather than three daily flights from Minneapolis to Albany, N.Y.
- Length of route. Capacity on flights of less than 750 miles has been trimmed more than on longer flights. For example, Independence Air cut nearly two-thirds of its seats between Washington Dulles and Raleigh-Durham, a 229-mile route.
- Time of day. Capacity on flights scheduled for 8 p.m. or later took deeper proportionate cuts than earlier flights. One in five flights between 10 p.m. and midnight have vanished since December 2004.
Route Maps Relatively Stable
Despite the reductions, the USA's biggest airlines, which serve hundreds of cities, so far have kept their route maps mostly intact. Delta, for example, has ceased service in the last year to just four of about 200 U.S. airports. Nonetheless, some cities have seen airlines pull out completely, and airport directors in many places are feeling vulnerable to future cuts.
Delta and Independence Air recently ceased flying to the Newburgh, N.Y., airport, roughly an hour and a half's drive from Manhattan. Independence Air's exit meant the loss of non-stop service to Washington, D.C., and Delta's departure meant the loss of non-stop service to Cincinnati.
"A small airport like ours is always one of the first that goes, because it's not as important as the larger ones," says Tanya Vanasse, the airport's marketing manager.
Indianapolis-based discounter ATA quit flying to its hometown. When ATA pulled out of Grand Rapids, Mich., the community received a double blow. It meant the loss of non-stop service to Chicago Midway, and it also caused fares for the remaining carriers to climb, says airport marketing manager Bruce Schedlbauer.
New Orleans lost two thirds of its capacity -- about 25,000 seats a day -- because airlines reduced service after Hurricane Katrina. Greenville, S.C., Appleton, Wis., and Aberdeen, S.D., have also seen deep cuts in service in the last year. In Aspen, Colo., airport director Jim Elwood is looking for backups to Northwest's feeder airline, Mesaba, one of the major airlines serving the resort town. Both carriers are operating in bankruptcy protection. Northwest has assured him that the schedule will stay intact for this ski season, Elwood says. Nonetheless, he says, "If you're looking for guarantees, the airline industry is not a good place to look these days."
Whadda ya say you take a time out from the webboard and check those med levels again, OK?
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