Plane Conversations

25% of Airline Delays Due to Volume

Have you wondered recently why air travel seems to have gotten worse but you can’t exactly understand why?  Are more people traveling?  Is the economy going gangbusters?  Is Social Media bringing the world together?

A quick stroll through the transportation department bureau of statistics is truly revealing.  The airline industry is methodologically reducing capacity AND increasing profits.  This does not make sense – how can any product sell less and make more?

For example:

The number of domestic flights has reduced from just over 10 million in 2005 to only 7 million in 2011.  This is the same number of flights as 2000

Revenue passenger miles have fallen from 570,854,623 to 473,968,295 over the same time period. That is roughly 100,000,000 less seat miles flown.

That makes sense because available capacity has dropped – seat miles have diminished from 739,841,385 to 571,129,091

Meanwhile load factors  (passenger-miles as a proportion of available seat-miles) have jumped from 77% to 83%.  Yup, that means that airplanes are a lot more crowded.

So then it should not be surprising that 25% of all delays are from overloading as airlines pull away from smaller airports and work the hubs harder.

Well, we know that aviation is a difficult business and that the industry racked up major losses but things are better now right?  The industry profits are well over 5 billion dollars.

But where is this money coming from? Well, first the reservation change/cancellation fees collected are 2.3 billion dollars in 2010 – this is the money that we pay the airlines for delivering ZERO service, seriously.  The baggage fees collected are also over 3 billion dollars. So there are $5B in fees and $5B profit…do the math.

Does anyone see what’s happening?  Can anyone see what direction these trends are headed in?  Does anyone see the alternative?  We do – the future opportunity is to build an alternate system of non-stop service using public charter certification on private jets.  If you are a traveler, set yourself free.  If you are an investor, Social Flights is a magnificent opportunity getting better every day…

After the justice department approved the merger of Continental Airlines and United Airlines last Friday, Congressman James Oberstar (D-Minn) voiced his displeasure again  with the merger and suggested that Congress might just need to reconsider the deregulation of airlines that happened in 1978.

The airlines have been stuck between a rock and a hard place for years. Combined profits of the industry are non-existent and customer satisfaction with airline service is somewhere down there in the range of our approval ratings of congress’s performance.

What we have received from deregulation are cheap air fares. Most people don’t remember what it cost to fly on the airlines prior to 1978 because they were either not old enough or did not fly on the airlines back then due to the costs. Real costs for flying via commercial airlines have come down over the past 30 years but the by-product of lower fares has been a reduction in what we consider to be service and the amenities of air travel. In some ways, airline travel has become just another form of mass transit much like rail service.

What we want we can’t have, and the government stepping in will not solve the problem.

We want our cheap $99 return fares, anywhere, anytime, and we want great service and convenient on-time departure schedules to go with the low price.

Deregulation brought on the competition with low cost carriers, which brought down the fares that we all enjoy.

Low fares combined with volatile fuel prices, worldwide competition with lower labor costs and airlines irrationally putting too much inventory of seats in the market took the profits out of the airline industry.

So now we have to adjust to some new fare structure and service level that the free market should work out. Mergers of air carriers are a part of this evolutionary process.

The airlines and their shareholders deserve to make a profit, or at least attempt to do so, while providing air transportation to the consumer. Unlike a utility where we have no choice, we don’t have to fly if we don’t like the combination of price, service and time efficiency of air travel.

As my Southwest flight pulled into the gate Sunday afternoon at Nashville, the flight attendant reminded us that we have many choices about who we fly with and he thanked us for choosing Southwest Airlines. In reality, we have choices beyond whom we fly with because we can drive and, in some cases, take the train. We can also choose not to go at all.  

Regulation of air travel from the federal government should be limited to matters of safety. Congress should not venture anymore than they already have into the regulation of customer service, pricing and competition. 

Government intervention has not brought much value to anything lately and I can’t imagine a scenario where reregulation of the airline industry will ultimately benefit the US economy and the consumer of air travel.

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Recently I read an article about a Phenom 100 delivery from Brazil to Orleans, France.  Unfortunately for the new owner the delivery flight took over two weeks to complete.  It seems that he tried a “do-it-yourself” delivery and suffered the consequence of lack of experience. This and other missteps during deliveries may be avoided with prior planning.

One of more common mistakes I see during deliveries is the failure of  Non-US citizens to obtain a visa prior to entry into the US.  The United States requires visitors from certain countries to obtain a visa for entry.  Usually most arrivals by air enter into the US through the Visa Waiver Program, but such is not the case with private air.  Be sure and check the State Department website for requirements that may affect your entry status.

When JetQuik brings a new Embraer Executive Jet into the US, we plan with a bonded customs broker to ensure a smooth importation process.  For foreign aircraft entering the US for the first time, importation is not necessary and the arrival is treated just like any other customs border crossing.  Usually JetQuik imports aircraft through Ft. Lauderdale.   We use SheltAir as our FBO of preference because it is co-located with US Customs on the field.

Phenom deliveries to the US don’t have to be a daunting process.  The Embraer Executive Jets office can help guide you through the process or recommend a competent delivery organization to relieve the stress of accepting your new Phenom aircraft.

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