Profit quest is keeping planes packed
Holiday travelers can expect little if any elbow room
NEW YORK - Don’t expect much elbow room on flights this fall.
Planes have never been so full. There was barely a spare seat this summer, and the next few months should be the same. To the list of things airlines have taken away - hot meals, blankets, headphones - you can add personal space.
For airlines and the people who invest in them, it makes sense. Because of consolidation, partnerships, and a push to eliminate unprofitable routes, airlines can adjust schedules to match demand and charge more.
But customer comfort is an afterthought. Not to mention space in the overhead bin.
“There are some days on some flights when there are simply no physical seats left,’’ said Jim Reichart, a vice president at Frontier, which sold 91 percent of its seats in July and August. Frontier and US Airways both had their best August for percentage of seats filled.
The figures should not surprise anyone who fought over an armrest this summer. With 130 million people flying, little perks like empty middle seats or flying standby were hard to come by.
Airline executives used to add flights and routes to protect market share. That often meant there were more seats than travelers.
“In the past, we had the problem of people operating airlines based on ego,’’ said airline consultant Michael Boyd. “Now, they’re operating on the basis on how much money they can make.’’
Overall, 86.4 percent of seats were filled by paying customers in July and August, according to an Associated Press analysis of preliminary data reported by 16 major US airlines. That edges out last summer’s record of 86.3 percent.
Add in seats occupied by off-duty airline staff, who often fly free, and passengers who redeemed frequent-flier miles, and there was hardly any room this summer.
Analysts say there may be more space this fall, but not much, if the economy slows further. Either way, flights around Thanksgiving and Christmas will be packed. And fuller flights anytime mean you are less likely to get a seat if your flight is canceled.
Airlines generally lose money on empty seats because they are already paying for fuel, pilots, and flight attendants. But how many seats are filled is only one factor in profitability. Airlines have to make enough money from fares and fees to cover fuel and labor costs.
“The question then becomes whether fares paid to fill those seats are sufficient enough to not only cover our costs but also generate a return for investors, repair balance sheets, and invest in the product,’’ said Steve Lott, spokesman for the Air Transport Association, the industry’s trade and lobbying group.
All major airlines except American have made money this year. United charged about 8 percent more for each seat in July than it did last year, and 11 percent more in August.
Until 1978, regulation limited airline competition, allowing carriers to profit even when planes weren’t full. In more recent years, technology has allowed airlines to routinely schedule full flights - and cutthroat competition has forced them to.
In the early 1970s, about half of seats were sold. In the first decade after deregulation, airlines sold about 60 percent of seats. That number increased over time. In 2008, faced with high fuel costs and falling demand in a recession, airlines ended hundreds of money-losing flights.
With the summer travel season over, airlines are cutting seats available in the United States by about 2 percent this fall, according to Barclays Capital. Lucrative international flights, which make up a smaller number of airline routes, will increase 3.5 to 5 percent.
Yesterday, major US airlines said they would limit the number of available seats, most likely by cutting more flights. That could reduce the airlines’ costs while driving up ticket prices.
Airline stocks rose yesterday, led by US Airways Group, up 16.3 percent, and Delta Air Lines, up 8.3 percent.