Tyler Cowen offers several explanations for why wait times vary across stores.
Some stores put impulse purchase items near the checkout counter, and need long lines to make sales. Some stores have more conflict at checkout than others, rental transactions take longer than cash transactions, and long lines can substitute for raising prices by adding a cost to the consumer (waiting) which substitutes for a cost to the seller (adding staff).
The explanation that most interested me in the context of aviation is
- Long lines may serve the cause of price discrimination. Perhaps the store offers personalized shopper services, free home delivery, or other services at a premium. These ancillary benefits might be more profitable if shopping takes just a bit of time. Low-income demanders won’t mind so much, high-income demanders may be pushed to the extra services.
There are clearly different markets of consumers who value their time in different ways.
So-called “legacy carriers” attempt to cater to the high-income demanders by offering first class travel. Legacy and some low-cost carriers offer ‘elite status’ to frequent flyers who are given the right to bypass long checkin lines, at some airports long security lines, and who may be given access to airport lounges.
But the most interesting difference to me is the way that entire airlines are set up to serve these different segments. Legacy carriers like American, United, Continental, and Delta operate “hub and spoke” systems where aircraft take off and land in defined banks of flights over the course of the day. There are tremendous periods of activity at their hub airports and long periods of inactivity. Schedules are geared to get passengers off one plane and onto another as quickly as possible.
While convenient for the traveler, this causes significantly higher costs on the part of the airline. They have customer service agents, ramp workers, mechanics, etc. working all day long without an even flow of activity. And they have to staff at a level capable of handling their high volume periods. Furthermore, once a bank of flights has landed and taken off, aircraft still on the ground will wait for the next bank of flights so that there are (in theory) enough passengers to fill up the aircraft.
The argument for doing this is the the hub and spoke model should allow the carrier to capture both a revenue premium and a geometrically-increased share of a market’s business.
In contrast, low cost carriers tend not to operate hubs. Even carriers like Airtran that heavily focus on a single city like Atlanta aren’t operating a hub in the traditional sense. While passengers may connect through Atlanta with great frequency, the on the ground wait time of those passengers tends to be nearly double that of a passenger at a major carrier hub. The difference in operating models is that a hub means that planes wait for passengers, while the low cost carriers force passengers to wait for planes.
In this way, an airline like Airtran is able to spread its activity out throughout the day and save on labor costs. It is also able to get a higher utilization rate on its aircraft. In exchange for these efficiencies, and thus profitability at a lower average fare, customers choosing Airtran are often forced to wait longer for their connections.