Make You Suffer$$$$

Why Airlines Want to Make You Suffer

By Tim Wu

This fall, JetBlue airline finally threw in the towel. For years, the company was among the last holdouts in the face of an industry trend toward smaller seats, higher fees, and other forms of unpleasantness. JetBlue distinguished itself by providing decent, fee-free service for everyone, an approach that seemed to be working: passengers liked the airline, and it made a consistent profit.

Wall Street analysts, however, accused JetBlue of being “overly brand-conscious and customer-focussed.” In November, the airline, under new management, announced that it would follow United, Delta, and the other major carriers by cramming more seats into economy, shrinking leg room, and charging a range of new fees for things like bags and WiFi.

It seems that the money was just too good to resist. In 2013, the major airlines combined made about $31.5 billion in income from fees, as well as other ancillaries, such as redeeming credit-card points. United pulled in more than $5.7 billion in fees and other ancillary income in 2013, while Delta scored more than $2.5 billion. That’s income derived in large part from services, such as baggage carriage, that were once included in ticket prices. Today, as anyone who travels knows well, you 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. Loyal fliers, or people willing to pay a giant annual fee, can avoid some of these charges; others are unavoidable.

The fees have proved a boon to the U.S. airlines, which will post a projected twenty-billion-dollar profit in 2014. To be fair, airlines are not just profiting because of fee income. Reduced competition, thanks to mergers, helps. There is also the plummet in the price of oil, which the airlines seem to have collectively agreed is no reason to reduce fares or even remove “fuel surcharges.” But for the past decade it is fees that have been the fastest-growing source of income for the main airlines, having increased by twelve hundred per cent since 2007.

If fees are great for airlines, what about for us? Does it make any difference if an airline collects its cash in fees as opposed to through ticket sales? The airlines, and some economists, argue that the rise of the fee model is good for travellers. You only pay for what you want, and you can therefore save money if you, for instance, don’t mind sitting in middle seats in the back, waiting in line to board, or bringing your own food. That’s why American Airlines calls its fees program “Your Choice” and suggests that it makes the “travel experience even more convenient, cost-effective, flexible and personalized.”

But the 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 necessity of degrading basic service provides a partial explanation for the fact that, in the past decade, the major airlines have done what they can to make flying basic economy, particularly on longer flights, an intolerable experience. For one thing, as the Wall Street Journal has documented, airlines have crammed more seats into the basic economy section of the airplane, even on long-haul flights. The seats, meanwhile, have gotten smaller—they are narrower and set closer together. Bill McGee, a contributing editor to Consumer Reports who worked in the airline industry for many years, studied seat sizes and summarized his findings this way: “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.”

Boarding for non-élite flyers has also become a miserable experience. There are far more efficient ways to load planes than the current back-to-front method, which is actually slower than random boarding. The process takes longer still thanks to the practice of letting flyers with status board out of turn and thanks to luggage charges, which compel fee-avoiders to cram their bags into overhead compartments. Airlines lack a real incentive to fundamentally improve boarding for everyone—by, for example, investing in methods such as filling both ends of an airplane at once. It would make life better and also defeat the status racket.

Fee models also lead most people to spend unwarranted time and energy calculating, agonizing, and repacking in the hope of avoiding paying more. The various fees make prices hard to compare, as a ticket can now represent just a fraction of the total expense. These are real costs, and they are compounded by ticketing practices, which demand perfect timing. When customers miscalculate their schedules or their plans change, the airline is ready with its punishment: the notorious two-hundred-dollar rebooking and change fee. Those change fees are particularly lucrative: in 2014, Delta and United are projected to collect nearly a billion dollars each. And the greater social cost comes from those who didn’t change their tickets even though they wanted to.

The fee model isn’t the only reason air travel has become more miserable in recent years. Airlines also benefit directly by throwing more seats into economy, because they have more to sell. But as mergers reduce competition airlines can more safely collude to provide poorer levels of service, and everything that adds to and increases differential experiences drives fee income, which is the most lucrative side of the business. Perhaps that’s why Delta’s new cabin plan offers five different classes of service, and why one unnamed major airline is reportedly considering introducing a level called “economy minus,” with even smaller seats than basic economy.

The various costs described here will not appear on any bottom line but can be easily witnessed in angry families, exhausted flight attendants, and the general sense of defeat emanating from passengers exiting coach. At best, it can be said that more people are able to fly for less; but, as JetBlue demonstrated, there need not be so much misery along the way. Ultimately, the fee models and the distinctions they draw make class inequality, which may be felt less in other places, painfully obvious. The conditions of carriage may lack the importance of other, more pressing social issues. 

But when an airline like JetBlue is punished for merely trying to treat all of its passengers decently, something isn’t right.