Tuesday, June 01, 2010

Airlines Keep Cramming Us In As Summer Looms

Airline domestic load factors -- the percentage of seats filled with paying customers -- continue to rise as travel demand rebounds while the industry cuts supply.

Continental, always the first to report its monthly operational performance, says that domestic load factors were 85.4 percent in May, while the number of available domestic seats fell 2.2 percent compared with last May.

All year, airlines have been filling about 85 percent of available domestic seats, which means that on most flights, there isn't a single empty seat. The airlines are absolutely determined to enforce what they call "capacity discipline," which means cutting seats and routes in order to keep the planes full at higher fares.

As I have been reporting for months, summer travel is going to be tough. You can't really fit many more people into the system. Planes are already full, fares are up, schedules have been cut and, as I reported, airlines are planning to preemptively cancel flights if the weather looks bad. As I said, that's to avoid the draconian Transportation Department fines (up to $27,500 per passenger) that can be levied if a plane sits on a tarmac for three or more hours waiting for weather to clear.

Any business traveler following bad advice I've been seeing around lately to book flights far in advance is probably making a mistake, by the way. If you change your plans, you're going to get socked with a $150 penalty, and you making new arrangements won't be easy. My advice: Pick your shots among airlines, wait and angle for short-term fare deals (hey, it could happen here and there), and forget about elite-status miles. The mileage programs, including the elite-status components, are a house of cards teetering on the edge of collapse.

Or drive when you can. Or stay home, which is what I plan to do as much as possible this summer.



paleolith said...

Classic perverse market incentives. Under current conditions, airlines maximize profit by filling every possible seat, service be damned. I don't see a free-market way out.

ChefNick said...

All I know is that my regularly scheduled trip to Japan (it's always July 22 to August 31) has jumped $1000 this year. It doesn't seem to matter how early or how late one books it.

1 can't remember how exactly the situation was in the 70s with Laker Air and all that stuff but something's gotta break soon. A whole buncha dudes gonna go straight out of business and another whole buncha dudes are gonna make a small fortune starting with a large fortune.

Can't wait for the day.