I can remember a time when it was special to fly in an airplane. When I was a teenager, my mother used to make me wear my Sunday best clothes when we went to the airport. It was a special time, a special event. It was a privilege to fly the friendly skies. And, then the low fare wars between the big American airlines and the unions killed the industry.
By adding routes to all kinds of crazy out of the way destinations like Prescot, Arizona, Dothan, Alabama, or Lewiston, Idaho, thousands of airplanes were added to the airlines’ fleets. Thousands of new planes per day needed hundreds of thousands of passengers to fill their seats over the years. In order to accomplish that, prices were slashed, and the ordinary citizen began flying all over the place wearing jeans, shorts, and/or flipflops.
Today, there are seven major air carriers based out of the United States and 19 smaller companies made approximately 11.8 million takeoffs in 2007 (last date of available data from the Bureau of Transportation Statistics) which is up from 7.5 million in 1994. The airlines now own an estimated 230,000 airplanes as of 2007 up from 172,000 in 1994. I am not sure, but I would wager money that there is a direct correlation between the number of routes, number of planes an airline owns, and the amount of losses on their bottom line. American air carriers simply travel to too many destinations on too many airplanes to earn a profit.
I recently flew to Las Vegas as many of you probably know thanks to my week long series of posts, “What Las Vegas Can Teach You About Personal Finance”. As I am sure that most people know, travelers are inundated with a slew of fees and charges in order to try and keep the airlines afloat. Now while you fly, you are hit with fees for your baggage, internet, drinks, food, headsets, blankets, etc. I spent $25 per bag each way to get my clothes to Las Vegas with me and had to pay $2.00 to watch the in-flight movie with their special crappy headphones. While I complained under my breath, my wife reminded me what a deal we got on our airfare for the trip. It wasn’t such a steal when you add all the fees.
Now, one airline is making a splash in the news while they charge for carryon bags. In August, Spirit will begin charging customers up to $45 to place a bag in an overhead bin. American Airlines, Delta Airlines, United Airlines, US Airways and JetBlue Airways agreed to not follow Spirit Airlines’ lead in charging for carryon bags, according to a recent article by the Associated Press. The five U.S. airlines knew their customers would not tolerate the carryon fee. But, the airlines’ customers will feel the pinch in other erroneous charges and fees. “Airlines are going to tack on every fee they feel they can get away with because it bolsters their revenue stream while allowing them to keep base fares lower,” the AP story said.
U.S. carriers earned $1.95 billion in fees alone during the third quarter of 2009, roughly 36% higher than for the same period a year ago. For the 26 largest U.S. airlines, those fees made up 6.9% of their total operating revenue during the third quarter of last year.
My Solution To The Airlines’ Problems = Raise Prices!!
Now stick with me here! My proposal to the airline industry is to charge me the full price of my flight with no extra fees added, a rate that covers ALL of your costs. It is amazing that we have had so many airlines hang on for so long without earning a profit. Do the airlines even know what their cost basis is anymore? They have taken losses for so many years that they have backed themselves in a corner and cannot find a way out.
Like the beer commercial….Here’s to you crappy airline executives! I lift up my cup of soda to you but not the whole can because you wouldn’t give it to me. Speaking of which…how much money do you save with that move?
Bring back the glory days of air travel. Bring back the glamour. Bring back a dress code. Cut the number of cities you fly to and make people rent a car. I would gladly pay my fair share for a great, fast, on time flight with good service from a pleasant crew if it were offered to me. I don’t mind paying for quality, but I can’t find any in the air.