How we arrived at the current sad state of air travel
The parade of recent record earnings from United, American and Southwest has signaled a fundamental shift in the airline industry: it's finally making money. So with all of this cash sloshing around the friendly skies, are we finally going to see a renewed investment in the passenger experience?
Short answer: No, unless your idea of an improved passenger experience is having "new" seats that are thinner and actually narrower than ever before. Premium cabin not withstanding, the airlines are happy to oblige the high demand from passengers without lowering their fares by squeezing more seats onto planes. According to American Airlines President Scott Kirby, "almost all of our capacity growth domestically is about putting more seats on airplanes."
While airlines should make a profit, it should be in tandem with thoughtful, comfortable service. So what has led to the sad state of air travel? Well, a few things:
Consolidation
The deregulation of the industry was promised to herald affordable air travel for all, and while initially it encouraged competition, it eventually led to an oligopoly — only a few airlines in control of nearly every market. Thanks to economies of scale, fewer, larger airlines have resulted in increased savings on cheaper oil and greater profits for those in the industry.
There's no incentive for a large airline to drop prices and expand service when there's little to no competition on its key routes.
Hub-and-spoke
In order to be successful in consolidation, the airlines had to shift their model from city pairs to hub-and-spoke. Airlines could reach more destinations by having one or two hubs, and could do so more profitably by feeding the hub with transiting passengers who will then fill up seats more reliably.
For small-to-midsize markets, this has led to reductions in service and skyrocketing fares. As USA Today columnist Bill McGee noted back in 2010, these changes are generally not positive for travelers:
When merger partners’ route maps overlap, certain cities will lose service, with fewer flight frequencies and loss of nonstops.
When one airline suddenly dominates a route where it previously competed with a merger partner, ticket prices are likely to rise—often considerably.
Basically, hub-and-spoke pushes fares up while increasing transit time
Capacity discipline
Capacity discipline is the term used by airlines to say that they are not going to add more flights. Rather, they will cram more seats into the most profitable routes, and then reduce service wherever capacity drops. This means that passengers face reduced options on less popular routes.
It used to be that airlines expanded service and dropped prices when there was a glut of profits — they used the windfall to grab market share and compete with each other. But now that there are fewer airlines, they simply don't have to do this. This means that airlines keep more profits to themselves while maintaining the capacity discipline.
Without intense competition, there's just no need to increase service or reduce the number of seats on planes to create a more welcoming passenger experience. And cheap oil certainly isn't going to change airline strategy.
What's next?
Unless fliers stop booking tickets, the airlines enjoy enough demand for a constrained supply — there's just no incentive to change. It has to come from the travelers themselves.
The overall shift towards larger markets has also led to an opportunity for an upstart airline to wedge itself into the holes left behind by the airlines. OneJet — a nascent airline that promises to run routes only served commercially by connecting flights — appears to be that upstart. While these planes are tiny — the Hawker 400 only has 7 seats — they fly routes that the "bigger is better" legacy carriers won't.
But outside of a full-on traveler rebellion, you'll just have to adopt "grin and bear" as your travel mantra.