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…

A LA Times article by Hugo Martín discusses what those who travel on the airline have experienced in the past year and it looks like we can expect more of the same in 2011.

Passenger demand has returned with the upturn in the economy and airlines have limited their growth in inventory (seats) in order to make a profit by increasing their yield per flight. Less empty seats means more control over pricing and greater yields per flight. Simple supply and demand economics.

That’s all great if you are on the selling side of that equation. If you are on the buying side it increases the likelihood that you will get bumped off a flight. When a flight cancels your next flight out may be the next day, not a few hours later, because that next flight in a few hours is already sold out.

Load factors in this article for Delta and United are running at around 84%. Load factors at that level mean a lot of flights are full at peak times and many are oversold. I don’t mind a full flight if you just get me home on time and don’t lose my stuff. I do mind it when you cancel the flight and tell me you will get me home the next day.

The LA Times article posts some interesting comments from a survey by Zagat of 8000 frequent fliers:

* The only thing missing is a blindfold and a cigarette.

* My bags get better service, but they pay extra.

* The only difference between economy and business classes is a shrimp on your salad.

* “Unwelcome aboard!”

* I don’t love getting up-close-and-personal with the head of the person in front of me.

* Who made them mad at their customers?

* Entree selections should be labeled “choose your poison.”

* When two crummy medium-size airlines merge, all you get is a crummy large airline.

* Seats make an iron maiden seem comfortable.

Business Aviation continues to have unprecedented opportunities to meet the market of frustrated travelers with a better proposition. As airlines turn into mass transit systems that sell a commodity (seats) are there still people willing to pay for service? More importantly can business aviation save time over airline travel and do people value their time more or less in today’s economy?

I think I know the answer but from my viewpoint I am biased. If the airlines just got me there on time I think I could tolerate the rest. But when I don’t get there on time then all of the service failings start to really get to me. Too much time in a crowded terminal waiting on that “next flight” is not good for travelers to reflect on the experience

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It takes a day like yesterday to remind me why we are in the business of business aviation.

The day started with a 4:00 am departure from the house to make it to the Nashville Airport by 5:15 am for a 6:15 am departure.  Leon Custers and I were taking a Delta flight to White Plains, NY to meet up with business partners in Danbury, CT.

Delta had the best price / schedule to get us to White Plains by noon with a 45 minute drive to Danbury.  The main benefit of White Plains (HPN) was avoiding one of the big NYC airports such as La Guardia (LGA), which are off schedule more than they are on.

Yesterday was a big snow storm day for the Midwest, and Nashville even had an inch or two on the ground, but the roads were fine.  We made it though check in and security fine and boarded the aircraft set for an on time departure. This was an originating flight so the odds for an on time departure were good. After the aircraft was loaded, we sat for 30 minutes waiting on fuel, and then a ramp worker to push the aircraft off the gate. In our world this happens rarely, and when it does, it is a major event to not make an on time departure due to line service issues.  This was not a good sign for the day.

We arrived in to Detroit for the connecting flight and it looked like the trip was going to settle back down. We were sitting at the gate with 30 minutes to spare and an on time departure status on the board for HPN.  About 30 minutes past scheduled departure the announcement was made that the flight had been canceled. Everyone was to rebook to HPN on later flights. The computer system at DTW was down so flights that had canceled were still showing as on time departures. This made it very difficult for travelers trying to rebook flights and figure out where their new departures were.  

 Here is where the problems starts for most travelers in the airline system.

Airlines have reduced their capacity (inventory of available seats). Load factors are up, providing more pricing strength and higher revenue per flight, which is good for the airlines profit margins.

It is not so good for the traveler when flights cancel. The next flight for us was not later in the day, because the next three flights were all sold out. It was the next day.

Needing to get to our destination in the same day, like most business travelers, we resorted to looking for alternatives within the system and settled on La Guardia (LGA) which is an extra hour drive to Danbury. So, after trying to avoid LGA we ended up there anyway, only 5 hours later.

While waiting on the flight to LGA we got to witness the DTW police deal with a lady who decided to go back down the jet bridge after getting off the aircraft. She ignored the warnings of the gate agent and created a whole crisis, most likely over nothing other than she panicked trying to go back after her bag.

Another lady traveling with husband and baby had a melt down because she left a bag on her previous flight and they could not find it. I know that feeling when you have just lost your lap top with your whole life on it. I felt sorry for her. The gate agent was overwhelmed with issues and could not provide much help other than to tell her to file a claim. 

Departing DTW for LGA our flight was further delayed because the catering did not get loaded on the aircraft on time.  The arriving flight aircraft could not off load passengers because the Jet bridge was broken,  and TSA decided to pull a random gate security check.  All of those issues caused a one hour delay.

On the taxi into the LGA terminal I overheard another business traveler on his cell phone recounting his day that sounded much like ours.  He had started at 4.30am, was on his third flight segment and still had not arrived at his destination. His comment – ‘this is another one of those travel Mondays”.  Another lady in front of us missed her planned dinner.

Fortunately the weather was good at LGA, so we did finally get there, but our bags did not.  A lady in the lost bags line was very upset.  She was on the last day of military leave and her stuff was lost.

We made it to Danbury and were able to make dinner with our business associates, although late.

So this morning it was the trip to Wal-Mart, when they opened at 7.00 am, for emergency clothes and a tooth brush to survive until the bags show up.  As I write this, I feel sure that this story could be told millions of times over by the road warriors who travel in the system every week.  

As we waited to board the flight in DTW to LGA, you could look at the countenance of the men and women business travelers, and see a look of exhaustion, defeat and frustration.

The purpose of air travel is to save time. Somehow the airline system is not gaining in productivity in its mission. It is slipping.  And what about the stress of the travel?  Not knowing for sure when you are going to arrive, dealing with missed meeting times, lost bags, rerouted destinations….

Enroute time from Murfreesboro, TN to Danbury, CT: 15 Hours

Average Speed door to door: 65 miles per hour

There has to be a better way, and business aviation should keep seeking to provide the solution in ways that more travelers can afford. I can tell you that everyone of the people I rode with yesterday would take another solution if they could.  

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In a recent post I commented on the study that claims delays in the airline industry costs US travelers 33 billion dollars a year in lost productivity.

Yesterday I made a small contribution to the 33 billion of lost productivity on a flight from New York back home to Nashville.

One of my business partners and I had business in Danbury and Norwalk Connecticut over a two day period. In putting the trip itinerary together it made sense to fly into New York (LGA) on Southwest, rent a car, do the multiple meetings, and then fly home the morning of the third day.

The day started with a 7am departure from the hotel in Norwalk with about a 50 mile drive to LaGuardia. We left early to avoid the worst of traffic coming into the city. The traffic was not too bad so we got to the rental car drop off at 9am and ended up at the terminal and clearing through security by 945am.   

The flight, scheduled to depart at 1135, ended up being 30 minutes late on the inbound arrival due to weather in the NY area. The weather was just some light rain and cloud cover. Nothing major, but IFR conditions nonetheless.

After boarding, the aircraft pulled way from the gate and got in line for a 45 minute wait for departure. More delay due to IFR spacing issues for landing and departing traffic.

We had to connect in Baltimore with a plane change but missed the connection due to late arrival. There was another flight to Nashville departing 40 minutes after our arrival so we rushed over to that departure gate to find out the flight was oversold. We were then put on standby for a fully booked flight 2 hours later. Reduced capacity in the airline system translates to high load factors and profit for the airlines but major inconvenience for the passenger when connections get missed.

During this process we found out that 15 of the New York passengers on the first leg were Nashville bound and all of them, like us, missed their connection in BWI.

Fortunately we were the last two passengers to get on the flight to Nashville. It was about 30 minutes late departing because it had arrived late into BWI due to weather in the Northeast.  

While boarding we walked by several very frustrated Nashville bound New Yorkers who were not so lucky.

Arriving into Nashville and retrieving bags, we were out of the Nashville Airport about 630pm. The drive home from BNA is about an hour for me so the door to door travel time from the hotel in Norwalk to the house was 13.5 hours.

On the GPS navigator that trip door to door is about 900 miles driving. Based on the drive miles we averaged 70 miles per hour door to door.

I have no complaints about Southwest Airlines. Their service was good as always. They don’t control weather and air traffic flow. The gate agents did an excellent job handling the passengers, some who were not so pleasant.  

My story could be told by millions of travelers. It happens every day in the system. All you need is a little rain and low cloud ceilings in the Northeast  and the log jam begins. It doesn’t unwind until the last aircraft hit their overnight destinations.

We have a Cirrus SR-22 available to us to fly for business. Had we taken the Cirrus we could have reduced that hotel to home travel time down to about 6.5 hours. This doesn’t account for the fact that we could have done the whole trip in two days instead of three by flying on our own schedule.

Next time I think I will fly myself and spend a few dollars more on using the Cirrus than the cost of airline tickets and the exrta hotel.

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If you do then something is wrong with the airline system or your employees.

I will vote for a broken airline system.

Thinking about a recent NY Times article by Lisa Galst entitled “Rewarded for Flying Coach” makes me smile as I write this.

What is the world coming to when you have to pay your employees extra for the misery of riding in the back of the aircraft in the cheap seats as opposed to booking the more comfy seats up front? Sounds like hazardous duty pay to me.

I have never heard any of our clients having to incentivize their employees to take a flight on a private aircraft. In fact it is sometimes the other way around. Last week when talking to one of our good clients he was telling me that he uses the flights he books to see his clients as a morale booster for his employees. Those who travel with him are excited about the experience and when they get back to the office everyone else hears about how cool it was.

With all that is happening in the airline industry:

• reduced capacity resulting in high load factors which equals crowded airplanes
• oversold flights and increases in denied boarding
• cancellations due to the new tarmac rules
• a la carte fees for everything the ticket no longer buys you

Is it any surprise that people just don’t want to do this anymore?

And the federal government has the idea that they can step in and solve the problem with legislation to make it against the law to provide bad service.

Private aviation and business aviation are sitting on a gold mine of opportunity.

What if these companies took the money they are spending to incentivize their employees to fly coach and used it to fly more in private aircraft?  They would get happier employees and gain a lot of productivity by not sending them through a hub that is cheaper to save a buck. Besides, with business aviation there is no such thing as routing through a hub. Its all point to point.

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Good news for the economy and the airlines, not so good news for the traveler, especially the business traveler.

In a May 31 article in the NY Times by JANE L. LEVERE  the word is that flights will be full this summer and airline fares will be up 

Quoting from that article:

This is not going to be a good summer for air travelers. They face a potential combination of crowded flights, high fares and labor disruptions. And that does not even consider the possibility of more canceled flights because of new penalties for airlines that encounter long tarmac delays or the potential of continued disruption in Europe from the volcano ash drifting from Iceland. Demand for business and leisure travel is expected to be stronger this summer than last, which means travelers will be fighting for seats that have been reduced significantly during the recession.

The article goes on to say:

…double-digit increases in demand are in no way being matched by similar increases in the number of seats. The Air Transport Association, the trade group of the American airline industry, said domestic capacity will be only 0.2 percent higher this summer than last, while capacity on international routes will be up 6.6 percent.

“Seats will be limited,” said Michael Derchin, airline analyst for CRT Capital Group in Stamford, Conn. “It’s going to be a more difficult travel experience for business people, with 90 percent load factors in the peaks.”

This is not good news for the business traveler who is already beaten up by the day to day rigors of flying the airlines. The idea of every flight being full and what happens when flights cancel, and the chaos that ensues trying to get people on the next flight that is also full is something that no one looks forward to. And the coveted middle seat will now be occupied. Maybe by you! Oh joy!

The article discusses the possibilities of disruption from volcanoes and labor strikes here in the US and the UK and the additional flight cancellations due to the new DOT rules on how long the airlines can keep us on the tarmac waiting to depart.

All depressing stuff if you are a road warrior.

The article closes with a suggestion that you have other options if it gets too bad. You can take a train or drive or just not go at all and video conference. What about the option of flying but not on the airlines? Anyone thought of that option?

Being the eternal optimist, where is the lemonade in this pile of lemons? 

Business and Private Aviation have the ability to meet the needs of the traveler without the hassle and frustration you experience with airline travel. The only limiting factor to more people using private aircraft is price.

So as the price goes up on the airlines, and the experience gets worse, does the gap close between the price versus experience of airline travel and private aviation? The system of airline travel is doing it’s very best to help those of us in that other aviation industry called General Aviation. We could not ask for a better competitor.

Through technological innovation of the aircraft we fly and innovation in how we meet the market of travelers we should close the gap of price and increase the value proposition on our side.

The time is right. Let’s not sit around and miss the window of opportunity.

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