by 2010 the domestic industryâs average topped
out at 82.1 percent. With an average that high, the percentage of flights at or
near 100 percent full obviously has increased as well. But this is not what
airline executives ever envisioned.
Analyst Bob Harrell explains: âWith airlines,
everybodyâs in that game to get the last twenty passengers in the bucket. But it
creates a terrible service problem. Transportation systems are designed for 65
percent to 70 percent capacity and they canât handle it when itâs twenty points
higher. Which youâll see if youâre in the middle seat of a 757 waiting to get
served.â
Consider it this way. Delta operates Boeing
737-800s configured in economy class with three seats on either side of the
aisle for a total of 144 seats, or 6 in each of the 24 rows. Putting aside those
passengers who are traveling together, leaving all 48 middle seats empty in this
3x3 configuration would require a 67 percent load factor. An 80 percent load
factor means only 29 middle seats will remain unoccupied; a 90 percent factor
leaves only 14 empty middles. Further, consider that every middle seat taken
causes discomfort for not one but three people. Obviously thatâs a lot of
crowded passengers, a lot of overstuffed overhead bins, a lot of squeezing and
jostling in the aisles, a lot of waiting for that lavatory.
Thereâs a technical term economists employ to
describe this condition: itâs called greed . Over the
last few years the same airline executives who have levied fees for checking
bags and calling reservations, who have outsourced flying to low-cost regional
airlines and maintenance to Third World sweat shops, have decided that the
airline business most closely resembles the sardine canning industry.
Whatâs more, industry experts note that not only
are all those full planes not good for passengers, theyâre not even good for the
airlines themselves. Thatâs because once an airlineâs loads hit the 70 percent
mark, that carrier starts âfeeding its competitorsâ because it canât handle the
spillover. In addition, higher loads create additional operating expenses.
âItâs awful,â said Rolfe Shellenberger, an industry
legend who began his thirty-one-year career for American Airlines as a
reservations agent in 1951. âTheyâre cattle cars now.â I shared with him my
contention that packed airplanes have eroded customer service, and he agreed,
saying full planes have greatly contributed to this deterioration.
Shellenberger also pointed out what he calls a
âcurious anomalyââthat Southwest has the lowest load factors among the majors,
yet has been the most consistently profitable. And itâs true: in 2010,
Southwestâs load factor was 79.3 percent, lower than the domestic load factors
for American (82.6 percent), Delta (82.9 percent), United/Continental (84.9
percent), and US Airways (83.2 percent).
And thereâs yet another negative side effect to all
those crowded airplanes. In early 2011, the aviation consulting firm Oliver
Wyman released its Airline Economic Analysis and noted: âIn a sense, as load
factor has approached its theoretical maximum, fees have replaced it as a source
of revenue growth.â Thatâs right: as long as cabins remain full, the big
airlines will continue ratcheting up those fees.
Things That Go Bump: Airlines
Deny Boarding
Those record-high load factors are fueling
another disturbing trend: more passengers being bumped against their will. The
industry calls them involuntary denied boardings and the DOT calls them
oversales, but by any term it means your airline seat has been given to someone
else without your consent. And itâs a practice that has become more prevalent in
recent years. According to the DOT, 1.09 passengers were denied seats for every
10,000 passengers boarded in 2010, an increase over the 0.89 rate in 2005.
As Forbes.com
Benjamin Blech, Roy Doliner