The New Yorker is on a roll bashing airlines, in November it was how bad United was which was really a piece complaining about mergers and a subtle attack on telecommunications mergers.
The piece is called “Why Airlines Want to Make You Suffer” and much of it is focused on fees. This is the meat of the argument:
[T]he fee model comes with systematic costs that are not immediately obvious. Here’s the thing: in order for fees to work, there needs be something worth paying to avoid. That necessitates, at some level, a strategy that can be described as “calculated misery.” Basic service, without fees, must be sufficiently degraded in order to make people want to pay to escape it. And that’s where the suffering begins.
The things airlines are charging fees for aren’t, for the most part:
- charging more than people used to pay
- for things that used to be free
- and that have any relation to inflight comfort vs. misery
Instead, the total cost of airfare inclusive of fees is significantly lower in inflation-adjusted dollars than prior to airline deregulation. And most fees are being charged for conveniences that weren’t ever free, or that have nothing to do with inflight comfort.
The piece wants to make a case about haves versus have nots. And there are political arguments out in the world about this, but using the miracle of human flight to try to score political points is both factually incorrect and misses the point.
Why Airline Fees Have Taken Hold
When airlines were losing billions of dollars, and desperately trying to fill planes at any fare, that wasn’t sustainable.
Airlines have broken apart the product they sell, and starting doing better even with fuel prices high.
- Part of it is that some of the things they were selling were limited in quantity and materially different as a product — emergency exit row seats are better than most seats in coach, there are only a few on the plane, so it makes sense to charge more for the better product rather than giving away the better product at the same price as everyone else is paying.
- Another part of it is that instead of raising fares as the economy improved and costs went up, breaking up the price increase and pushing much of it into fees is more beneficial to airlines because it saves them the 7.5% tax on domestic airfares. The more money shifted into fees and out of base fares, the less in taxes airlines are paying. We get fees because of the distortionary impact of federal taxes.
At some level we could pay higher fares or we could pay a base fare and then pay more in fees.
There’s No Plot Against Coach Passengers
It’s not reasonable to believe that airlines are trying to make the base level flying experience worse so that we’ll pay fees to avoid it.
The base flying experience isn’t actually getting worse, outside of the effect of planes being full. That means security and boarding is more stressful, there’s less overhead bin space so the last folks to board have to check their bags (sure there are more people carrying on bags too to save on checked bag fees, but remember that airlines used to allow two carry on bags and not just one). It also means less elbow room, because a lower chance of having an empty seat next to you.
There is the claim in the piece that coach seating is tighter.
The seats, meanwhile, have gotten smaller—they are narrower and set closer together… “The roomiest economy seats you can book on the nation’s four largest airlines are narrower than the tightest economy seats offered in the 1990s.”
There’s some truth and some falsehood here. The bold claim that the roomiest economy seats are narrower than the tightest economy seats offered in the 90s is demonstrably false. United economy plus on an Airbus A320 is both wider and with more legroom than a United 737 economy seat in the 90s. There was no economy plus then. And Airbus seats are simply an inch wider than Boeing seats, that’s not new.
What is true is that American is introducing 10-abreast seating on their international 777s. They follow airlines like Emirates and Air France in doing so. In contrast, United remains 9-abreast as it was when the airline was that plane’s launch customer in 1995.
And then there’s stuff that’s just not true:
Perhaps that’s why .. one unnamed major airline is reportedly considering introducing a level called “economy minus,” with even smaller seats than basic economy.
And there are always fake reports of Ryanair introducing flights that require you to stand the whole time. ‘Economy minus’ is a term sometimes used to contrast with extra legroom seats United offers (economy plus). And stripped down economy offerings are about moving towards a Spirit or Allegiant model of charging even more fees and lower prices (e.g. fees for carry-ons,, fees for anything you don’t do online). It’s not about “smaller seats” than economy has now.
Ultimately the flying experience is tougher because more people are flying, which is a benefit to the economy and to other people rather than a bad thing overall. The only way to avoid it would be a big subsidy from the airlines of continued losses by flying empty seats.
At the same time, Delta is running an historically good airline operation, and the inflight internet is revolutionary and just as good in coach and first class. Sure, you pay for it, but it’s not something that you used to get for free… it didn’t even exist. (And my 10 year prediction is that inflight internet eventually does become free just like it’s becoming free across the major hotel chains.)
Domestic Premium Cabin Flying is Actually Getting Worse
The idea that airlines are making their base product worse in order to upsell you is dealt a strong blow by looking at what’s happening to their premium products. While coach isn’t really getting worse, domestic first class is actually getting worse. When I first started getting upgrades in the 90s lunch on a cross country flight would often be a steak. And that was served after a separate appetizer that may have been shrimp. And was followed by a separate dessert service (not just a single cookie).
It’s not just American making cuts, either.
Bashing Airline Fees is Mood Affiliation, Not Logic
We don’t like fees. Checked bag fees are enough of an annoyance that credit card companies pay airlines big money to waive, because it drives card signups. But the fees, travel is tough, and class envy all get mixed up and tossed together without any real argument that holds together getting made.
What fees are actually being charged? And what are the complaints in the piece?
[Y]ou can pay fees ranging from forty dollars to three hundred dollars for things like boarding in a “fast lane,” sitting in slightly better economy-class seats, bringing along the family dog, or sending an unaccompanied minor on a plane.
Checked baggage isn’t free for most customers, although signing up for an airline co-brand credit card does generally waive those fees. The desperation of economy travel though can’t really come down to paying for checked bags.
Priority boarding? Clearly not something everyone used to get for free. How could it be? If everyone had priority boarding, to paraphrase Delta, then nobody has it. Not everyone can board at the same time, because physics.
Pet in cabin fees aren’t new, though they’re higher than they used to be, and something only a tiny fraction of passengers deal with. That can’t be the crux of ‘making the economy experience worse’ and first class passengers pay for this too. The same is true for unaccompanied minor travel.
Sitting in extra legroom economy seats didn’t exist in the mid-90s. United drove economy plus as a key product differentiator. American introduced extra legroom throughout the cabin but people didn’t care enough about this and choose it over other airlines even when price was the same, so American abandoned the effort. It’s only the past few years that American and Delta offered extra legroom seats in part of the cabin.
When Continental took over United, it was presumed that economy plus would go away. But they found they could make more money by offering it. It’s an improvement over the alternative, not something that used to be offered free that now comes at a price. US Airways has never had this, it’s the American merger that leads to its eventual roll out.
Not mentioned in the article is that coach meals are no longer free. Continental was pretty much the last US domestic airline holdout. But airline meals never got raves, they were the butt of jokes for years. And paid food options are often better than what used to be offered without charge. Nonetheless, this is something that could at least be offered up as something that passengers have to pay for that used to be included.
- You can join the 40,000+ people who see these deals and analysis every day — sign up to receive posts by email (just one e-mail per day) or subscribe to the RSS feed. It’s free. You can also follow me on Twitter for the latest deals. Don’t miss out!