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Airline Mismanagement

The airlines bemoan the drop in passenger numbers, but it seems this has been foreshadowed by the airlines' own failure to provide sufficient flights.

If you cut back your flights and available seats, it sort of seems intuitive that your passenger numbers will drop?

 
 
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Why Fewer People are Flying part 2

Reasons 3 - 5 :  Because there are fewer seats and better alternatives
 

Part of the reason passenger numbers have stopped growing and started to shrink?  The airlines have cut back on flights, and many of the remaining flights are already full.

Not even the cleverest airline exec can sell more seats on a plane that is already full.

Part two of a three part series on why fewer people are flying - please also visit

1.  Facts, figures, fares and fees
2.  Full and fewer Flights, better alternatives
3.  The total unpleasantness of air travel today

 

 

There's been a massive change in airline flight operations over the last few years, with steadily increasing numbers of passengers per flight, reaching levels that were previously considered to be both impossible and ill advised.

Could the reason that passenger numbers have stopped growing and started to fall back be insufficient flights and too few available seats to support the passenger numbers that otherwise might potentially appear?

Reason 3 :  Full Flights Limit Airlines' Ability to Accept More Passengers

Here's a statement of the obvious :  If you're flying a full plane, you can't grow your passenger numbers, no matter how hard you try.

There has been an enormous increase in the average 'load factor' on flights over the last few years.  The load factor is the percentage of seats on a plane that are sold.

For the longest time, airlines averaged load factors comfortably below 70%; indeed the rule of thumb for airlines was to price a flight so that it would break even at about a 60% load factor and anything above this represented profit.  Conventional wisdom in the industry maintained that it was somewhere between impossible and ill-advised to have load factors averaging much above 70% because in such cases, with an average load factor of 70%, this meant some flights were full or nearly full, with the result that airlines would sometimes be turning business away.

It also meant that the airlines had a more stressed system, with less ability to absorb passengers from other flights in cases of cancellations or delays.

Now look at this chart showing the load factor, both monthly (interesting to see the seasonal swings) and a twelve month moving average

Average load factors have grown from an operationally sound level averaging in the high 60's with swings up to as much as 75%, and reached an unthinkable average level of 80% with monthly swings exceeding 85%.

This means two things.  First, from the passenger/customer experience, flights are full, and therefore, appreciably less pleasant.  Gone are the days where we could be sure of an empty seat next to us, and now we consider ourselves lucky to avoid being squashed into the middle seat ourselves.  It seems almost every flight we're on is 100% full, making for longer time to board, more hassle finding space for carry-on (and with the massive fees for checking luggage, more people are carrying on more things), and a longer time to deplane at the other end, to say nothing of a more cramped and crowded flying experience.

Am I stating the obvious to say that for this reason alone, flying is massively less pleasant than it used to be, and we're encouraged to avoid flying if at all possible?

The second thing this means is the airlines are limiting the number of passengers they can carry.  Let me explain how it is that when airlines are averaging (say) 80% full flights, with apparently the ability to still add more passengers, this is not the case.

While the average flight load might be 80%, this means that some flights are 60% full while others are 100% full.  Therein lies the problem, masked by the average number.

Another limiting factor is that if a person wants to fly somewhere and back home again, they will typically take at least two flights (of course - one there and one back), and maybe four or more (if flying through a hub).  If just one of their flights is full and unavailable, and assuming no other flights at convenient times, this doesn't mean they simply reduce their travel from four flights to three.  It means they end up cancelling or deferring their entire journey, even though three of the four flights had availability.  A single full flight has cost the airline four passenger sectors.

Here's a news-flash to the airline executives :  If your plane is full, you can't grow your passenger numbers any more.  Don't blame your lack of passengers on us.  Blame it on yourself and the lack of seats you now have available to sell.

Which of course leads to :

Reason 4 :  Fewer Flights Mean Fewer Passengers

Here's an interesting question - which came first?  Fewer flights, or fewer passengers?  Are the fewer passengers the result of fewer flights, or are fewer flights the result of fewer passengers?

Look at this chart which shows the monthly changes, up or down, in ASM and RPM compared to the same month the previous year.  For the period prior to 2001, the red line (available airline capacity) sort of matches the blue line (passengers).  Now skip the 'discontinuity' caused by 9/11 and see the clearly apparent trend since then - the addition of flights has lagged behind the growing demand for flights.  The red line is almost always lower than the blue line.

Note that these numbers are a somewhat simplified way of answering this question, but they give an illustrative if not exact answer.

In any case, the question isn't as important as it may seem.  The key issue is not which happened first way back when, but rather why the airlines allowed capacity to be maxed out and didn't add extra flights to respond to the clear opportunities in the market - either before or after their current flights started operating 'too full'.

If the airlines are worried about too few people flying, here's a suggestion - give us some more flights to travel on.

Reason 5 :  Alternatives to Flying Are Now Cheaper

With a hat tip acknowledgement to the tougher economic times, let's think what has happened in the last six months.  The price of gas for our car has more than halved.  Most of us were paying something over $4/gallon in the middle of 2008.  By the end, we were paying something under $2/gallon.

A similar thing has been experienced by the airlines.  They started 2008 with fuel costs around $2.70/gallon.  In July, they were paying up to $4.25 a gallon, but by the end of the year, their cost was about $1.35, the first time since early 2005 that jet fuel prices have been that low.

But the price of air travel has stayed constant.  Actually, no.  It hasn't stayed constant.  The airlines have continued to increase fees, even after July when their fuel costs started plunging back down (and - get this - have continued to blame the need for their exorbitant fees on high fuel costs!).  So the total true cost of traveling somewhere by plane has steadily increased all year, while the cost of driving has plummeted in the second half of the year.

If you're a family of four and finding cash a bit shorter now, you'll think hard and long about paying top dollar to fly somewhere when the cost savings opens up so much if you take your car instead.

This is confirmed by holiday travel statistics from AAA, who projected that the Christmas season saw only a 1.2% decrease in people traveling by car (compared to the 9% decrease in air travel).  Interestingly, the AAA estimates there was a small increase of almost 1% in the number of people traveling by train or bus over the Christmas period.

These numbers clearly show that the reduction in travel is not happening consistently across all forms of travel.  It is concentrated primarily on the airlines.

Part two of a three part series on why fewer people are flying - please also visit

1.  Facts, figures, fares and fees
2.  Full and fewer Flights, better alternatives
3.  The total unpleasantness of air travel today

 

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Originally published 9 Jan 2009, last update 19 Dec 2013

You may freely reproduce or distribute this article for noncommercial purposes as long as you give credit to me as original writer.

 
 
 
 

 


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