This Made Flying Absolute Hell but It’s About to Change
Mario Tama / Getty
America's airlines have had a good pandemic.
Early predictions that they would not survive the drastic restrictions on air traffic after lockdowns were wrong. The effects were certainly severe. But a year after the sudden and drastic slump in air traffic, this is an entirely different view.
Domestic flights have recovered much faster than anyone dared to predict. In March it rose by 20 percent.
And behind this picture begins a new phase in the shabby roller coaster history of air travel in America. Most importantly, more and more smaller cities are back on airline route maps after decades in limbo.
Part of the reason is that as flights to most long-haul overseas long-haul vacation destinations are closed, Americans are rediscovering attractions closer to home: national parks, ski resorts, and beaches that are as good as any in the world. But it's also part of a deliberate shift in the range of air travel across America. This could be the biggest change in our domestic airline infrastructure since airlines were deregulated in the late 1970s.
As intended, deregulation resulted in a significant drop in airfares, but it also created this curse on so many travel mega-hub airports such as Dallas-Fort Worth, Atlanta Hartsfield-Jackson, Washington Dulles and Chicago O'Hare, wherever Cross the most heavily frequented routes with the spokes - fewer routes that flow in from smaller cities.
The problem was that while this was more efficient for the airlines, it was often less convenient for the passengers. Where previously there had been direct non-stop flights between cities, many of those flights were rerouted through hubs (instead of flying directly from A to B, passengers were from A to Z and then to B), which is a change (or sometimes) to the Sequence had two changes) to a larger aircraft to their final destination. Some smaller cities had no flights at all.
At the same time, airlines that once served smaller cities - Braniff, Eastern, Allegheny, Midwest Express, US Airways - were increasingly being swallowed up into larger ones: 80 percent of domestic traffic is now controlled by just four airlines: American, Delta, Southwest, and United. They function as an oligopoly - not like an old-style illegal price-fixing cartel, but as gamblers so powerful that they can avoid creating a circular shooting group of ruinous competition and maintaining a remarkably similar level of ticket prices - and grip their hubs on routes.
This pattern is now being seriously challenged. The remaining 20 percent of the market is split between full-service airlines like Alaska and JetBlue and ultra-low-cost carriers, ULCCs, including Spirit, Frontier and Allegiant.
They are joined by newer airlines and startups that are building routes between smaller cities that have either had no direct flights or were underserved, targeting what John Grant of flight data analytics firm OAG calls "hub-bypass leisure services." A trend that is driving the future of post-COVID air travel in America.
(Grant noted that up to 1.5 million people were flying a day in the US in March, while air travel in the UK was down 41 percent due to increasing lockdowns across Europe.)
Another analyst, Craig Jenks, who heads New York-based Airline / Aircraft Projects, sees otherwise: "It's a whole new, mostly Allegiant-powered, ecosystem."
Jenks points to Sun Country, which was recently reissued under CEO Jude Bricker, who was previously Allegiant's chief operating officer. Andrew Levy, who founded Burbank-based Avelo Airlines this week, Allegiant co-founder and its chief financial officer; and Lukas Johnson, chief commercial officer of upcoming startup Breeze, who was previously senior vice president at Allegiant.
Is there a secret sauce at Allegiant that got these three into their new jobs?
Says Jenks, "At its simplest, you keep costs very low, stimulate demand for neglected destinations, have absolutely no connecting traffic, either within the airline or to any other airline, and get a high percentage of sales directly through the website the airline. "
Allegiant's success was originally based on launching non-stop flights from smaller cities across the country to three major leisure markets: casinos, theme parks and beaches.
The casinos are located in Las Vegas, Nevada, which is Allegiant's main base and operate numerous non-stops every day. Their second largest destination is Orlando, Florida, where they operate around 30 daily flights to Sanford, a former naval base that is far cheaper and far less crowded than Orlando International and is close to Disney World, Sea World, and Universal. For the beaches on the Gulf of Florida, they fly to Punta Gorda near Fort Myers, one of the airports that lost all air traffic after deregulation, but has been reconnected to numerous cities since 2008, mainly thanks to Allegiant.
Sometimes one of these neglected airports can span the entire history of airlines in America. Take, for example, an airport that few travelers have ever heard of today, the Tri-Cities Airport in Pasco on the border between Washington state and Oregon.
When the first domestic airline networks emerged in 1926, the first flight between Pasco and Elko, Nevada, was operated by Varney Airlines - a startup that was soon swallowed up by United at a time when that airline was actually owned by Boeing. Pioneering work on these early routes was only possible because the airlines were partially financed by the Post as postmen. And flights like the one from Pasco to Elko, which rumbled over mountain ranges like the Cascades and Rockies, were by far the most dangerous, since the pilots had only crude navigational aids.
Since then, the fate of Pasco Airport has changed from boom to bust with that of the airline business. With the promise of another boom, the airport opened a new terminal and baggage handling system in 2017. It is now served by Alaska, Delta, United, Allegiant and, starting this month, Avelo with nonstops to Burbank.
Another group of destinations that are now receiving non-stop flights are reminiscent of the Arcadian-American West - the romantic version of the old west mentioned, for example, in the paintings of Charles Marion Russell, but now in winter for its ski resorts and in the Summer is attractive. For spas, dude ranches, hiking trails, river fishing, and in non-COVID years, executive retreats. For example, Sun Country’s network includes both Bozeman (population 46,000) and Kalispell (population 23,000) in Montana and Jackson Hole (population 10,000) in Wyoming.
Breeze, which launches later this year, doesn't emulate the Allegiant model. It seems aimed at being in a class of its own. This is not surprising as it is about the founding of David Neeleman, a veteran airline startups whose big breakthrough was the launch of JetBlue.
While Neeleman will target underserved smaller cities as well, the style and quality of the airline will be as important as their prices. When he set up JetBlue, Neeleman built the brand on the virtues of a jet, the Airbus A320, and its cabin, which was wider and airier than the competing Boeing 737 jets used by Southwest and other competitors. He put video screens in the seat backs to enhance the game of in-flight entertainment.
This time Neeleman relies on the newest Airbus jet, the A220, the most advanced single-aisle jet in the world. Breeze won't fly with A220s. The first will not be delivered until next year. Instead, he will use the Brazilian-made Embraer 195 with a narrower cabin, but also a state-of-the-art small jet.
The A220 is the type of jet that airlines and passengers alike dream of. It has a significantly improved cabin climate for the passengers and spacious 3X2 rows of seats in the coach. Far more economical for airlines than current jets, it is the perfect size for the “long and thin” routes (longer routes, lower passenger demand) that are America's new, smaller intercity routes.
It's a fair bet that Neeleman's A220 cabins will include a mix of spacious business-class seating and a premium touring coach section. There will be no seatback videos. It is now more important to have WiFi and let passengers use their own devices. Breeze also avoids the sardine effect in the coach, which makes the ULCCs unpopular with many passengers.
In fact, tight seating and poor customer service are a common source of passenger complaints about these airlines.
For example, Allegiant has a customer rating of 3 out of 10 with Skytrax, a global airline review service. This is based on 1,373 passenger ratings. While it should be said that the reviews of this review system are overweighted by people who have experienced flights from hell (satisfied passengers usually don't bother to report this), a review of the reviews of these complaints reveals a weakness for the USA appears to be endemic to ULCC's business model.
On many of their routes, these airlines do not operate a regular daily schedule like a full-service airline. They cover their wide spread of cities with fewer aircraft, serving many destinations only once or twice a week. The Allegiant website states in advance: “We don't fly to every city. And in most of them we don't fly every day. "
When a flight is canceled due to a technical or weather problem, passengers can often get stranded.
"There are often no other aircraft within a thousand miles when one is needed," William J. McGee, an experienced passenger attorney for the airline, told The Daily Beast. "There is no viable backup plan when things go bad."
Passengers are left to their own devices to find an alternative, and the cost of doing so negates any benefit that makes the cheap fares. And ULCCs typically do not have the manpower required to guarantee adequate customer service.
McGee recalled that prior to deregulation, airlines had binding agreements that passengers would have to be offered these seats if a flight was canceled and seats were available for the same destination on another airline. For now, the big four disagree on doing this with the ULCCs. Pete Buttigieg's Department of Transportation is urged by consumer advocates to apply these agreements to all airlines.
The supposed cheapness of ULCC tariffs can also be an illusion. Almost everything is an extra: checked baggage, carry-on baggage, food and drinks. An essential tip when booking is never to go to payment without first knowing what the total amount will be.
"My advice to passengers," said McGee, "is that not all journeys are created equal." When departing and arriving on time is an absolute must, flying a larger airline is the convenience. If it's a loose flight schedule, a low-cost airline can save money, provided a buffer of about a day is built into the itinerary. "
Significantly, Allegiant has a better track record on routes where the flights are most frequent: Las Vegas. It also operates one of the largest ULCC fleets: 93 jets, all Airbus.
In contrast, Avelo starts with just three jets - the 15-year-old Boeing 737. Sun Country operates 31,737 people of the same age. Breeze is waiting for his A220 and starts with 15 Embraers.
Innovation takes place in an industry when the entry price suddenly drops. This is what happens here: There is a deluge of relatively young jets being offered by leasing companies at prices around 15 percent lower than last year. Sun Country is likely to pick up another 737s and Allegiant could pick up some of the 600 Airbus A320s currently parked. There are also a large number of pilots and cabin crew looking for work.
All of this gives the ULCCs an advantage as they don't have the huge fixed costs of older airlines, e.g. B. Serve pension funds and have to compete for gates at hubs - and get on and off routes faster depending on the season and demand.
When the pandemic broke out, airlines were high on the list of bailouts for the government. That rightly caused trouble, as the big four, who posted a string of boom year earnings instead of building reserves for a rainy day, have rushed to buy back shares - American Airlines alone now has $ 50 billion in debt.
The airlines received $ 54 billion in grants to pay their employees and $ 25 billion in loans. But even with that help, the major airlines still needed huge amounts of money - in the first quarter of this year, analysts estimated that Americans were consuming $ 30 million a day. The Southwest burned between $ 10 million and $ 12 million a day - although that is different from an original estimate of $ 15 million.
American ended the first quarter in a loss of nearly $ 1.3 billion, but Southwest returned to profits after its first loss-making year, earning $ 116 million.
And of the big four, it's the Southwest that is most aware of the ULCC's challenge. Unlike the others that offer international routes, Southwest's network, apart from a few Caribbean and Mexican destinations, is entirely domestic and has a new focus on leisure and vacation destinations due to the decline in business travel. It certainly has the message about the appeal of nonstops. For example, this summer there will be 37 direct flights from Austin, Texas, including Avelo's base in Burbank and Breeze's base in Salt Lake City. It also flies to new destinations in small towns like Myrtle Beach, South Carolina and Eugene, Oregon.
However, analyst Jenks points out that while Southwest competes in what is known as the hub-bypass market, at least 30 percent of its flights are still handled through hubs and many trips still require connections.
The craziness of the hub-and-spoke system is well illustrated by what happens when you want to fly to Eugene from Oakland, California. On Delta, this flight can include two aircraft changes in Los Angeles and Salt Lake City and last nine hours and 15 minutes. Southwest's non-stop promotion will last an hour and a half beginning in September.
It is evident that once passengers are freed from the tyranny of mega-hubs, they will never want to fly like this again. Let's hope this is a trend where nothing stops.
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