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Air Travel Trade-offs

Doesn’t it seem like air travel has become more of a hassle recently compared to a few years (or a decade) back? Even leaving aside stricter security after 9/11 there appears to be more complaints about air travel these days. How much truth is there in these complaints? Let’s look at the possibilities, namely competition among carriers, new TSA rules and weather.


Looking at real data, it is clear that in an effort to become more profitable (or perhaps less unprofitable) airlines are filling more seats, leading to more people getting bumped off flights. Perceptually this could be experienced as more airlines calling for people to give up their seat at the gate. Why? Flying empty seats is unprofitable so they try to fill as many as possible usually overbooking since there are always cancellations. When such cancellations don’t happen they are forced to buy off passengers willing to take a later flight for an incentive. This practice has been around for a long time but gets trickier when the number of available flights is less and more of them are full.

Why are there less flights (about 15% fewer than in 2005)? Again, to prevent empty seats from flying, and to maintain profitability in a highly competitive industry airlines have less flights. The competition is so tough that airlines have to cut prices quite a bit. But are prices really that much lower? Compared to 1995 (and adjusted for inflation) airline prices today are actually 35% cheaper per mile

But then airlines try to make up for it by cutting services (such as free meals). Charging for checked luggage and selling meals in flight are other ways of trying to raise revenue. That of course has the effect of getting passengers to carry more luggage on board, making the flying experience worse for everyone. Now there is talk of some airlines thinking about charging for carry-on luggage. No doubt how that will be received!

TSA rules may also be contributing to the problem since airlines now are fined for overlong waits on tarmacs. This may be forcing some of them to cancel flights rather than risk a fine not only inconveniencing passengers on that flight but also those waiting for connecting flights from the plane’s destination. So even though bad weather conditions actually decreased this year cancellations doubled. Read this great post (and linked ones) for a succinct summary of the problem.


What is the solution? Better weather prediction algorithms can certainly help. But ultimately it comes down to a trade-off that passengers have to make. Longer wait times or more frequent cancellations. When is each one preferred and by whom?


Sounds like a ripe subject for a conjoint analysis!

Tagged in: Consumer Behavior


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Guest Monday, 26 October 2020

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