Endless lines, crowded airports, disappearing amenities, and
shrinking legroom have become the norm for most flyers around the
In other words, flying in America is terrible.
This has long been the pervasive narrative surrounding the US
And a recent series of embarrassing customer-related incidents
have managed to turn this deep-seated disdain into unadulterated
anger towards the airlines.
However, the question must be asked. Is it really that bad?
And if it is, how did we get there and how do we make things
First off, life for those flying at the front of the cabin,
especially those on international and trans-continental routes,
are actually better than ever. New premium cabin products such as
United Polaris, Delta One, and JetBlue Mint are nothing short of
New luxury airport lounges are simply palatial. On the aircraft,
seats convert into lie-flat beds. Thousands of movies, TVs shows,
and songs are available through massive private entertainment
screens. Lavish multi-course meals come from menus created
by gourmet chefs paired with wines personally selected by
The state of economy flying today
Unfortunately, this not the experience for the vast majority of
us. That’s because we fly in economy.
These days the coach experience is best described as “unbundled”.
Want to check your bags? There’s a fee for that. Want to pick
your seat? There’s a fee for that. Want more legroom? There’s a
fee for that as well. And once you are on board and want a hot
meal? There’s a flight attendant with a mobile device waiting to
swipe your credit card.
While there are a significant number of passengers who prefer
this a la carte flying experience, many don’t. But the reality is
that the unbundling of the economy class products reflects an
unpleasant, but shockingly reasonable truth in the airline
Economy class passengers simply don’t bring in enough dough to
warrant a more plush experience.
According to Airways senior business analyst, Vinay Bhaskara,
value conscious economy travelers may be the airline industry’s
largest customer base but individually are not all that
In fact, American and United Airlines have both said in the past
that roughly half of its annual
revenue come from just 13% to 15% of customers who travel on
a repeated basis. These passengers tend to travel in business
class and pay full price.
As a result, it makes perfect business sense for airlines to
funnel their cash towards the more profitable travelers.
Historically, there is actually little to no incentive for
airlines to offer a more roomy and plush experience in
“The reality is that people have proven to the US airline
industry time and time again that, at volume, they prefer the
lower advertised price regardless of how many add-ons they have
to pay for,” Bhaskara said in an interview with Business Insider.
For instance, before American Airlines unbundled its economy
product, it struggled to compete against Spirit Airlines for
“The low-cost carrier always won because people either don’t care
or aren’t sophisticated enough to differentiate between a bundled
and unbundled fare,” Bhaskara added.
In fact, time and time again, airlines’ attempts offer a more
comfortable and friendly product have failed to pay off. Bhaskara
cites American’s decision in 2000 to add 3-5 inches of legroom to
all of its economy class seats and Virgin America’s struggle for
profitability while offering award-winning service as examples.
How did we get here?
The understand why the US airline industry is the way it is now,
you have look back to October 24, 1978. On that date, President
Jimmy Carter signed the Airline Deregulation Act — stripping
power from the government agency that strictly controlled the
“Deregulation is completely responsible for the state of the US
airlines industry,” Atmosphere Research Group travel analyst
Henry Harteveldt told Business Insider.
Prior to deregulation, the US government was the kingmaker in the
airline industry — dictating which routes an airline could fly,
which airports an airline could dominate, and how much they could
In addition, the US government put airlines in a position to
succeed by limiting direct route competition and ensuring prices
remain high, Harteveldt said.
Without the need to compete on price, the airlines competed on
experience and service. Both Harteveldt and Bhaskara admit flying
during the pre-deregulation days was much more posh and
However, post deregulation, many of America’s airlines struggled
to survive — failing to balance their old habits with the reality
of modern competition. Of the major US airlines in operation
prior to deregulation, only Southwest and Alaska Airlines fly on
today without having declared bankruptcy.
In the years, since the last financial crisis, US airlines seem
to have to have figured out the path to financial stability. And
that’s where the unbundling of products, push towards higher unit
revenue, and leaner operations come into play.
With that said, deregulation isn’t without its merits. According
Harteveldt, had the airline industry not been deregulated, the
flying experience today would probably be much better in terms of
legroom in economy and banquet dinners in first class. However,
that experience would be significantly more expensive, he
According to Bhaskara, airfares today are roughly 40% cheaper
than it was in the 1970s — effectively democratizing air travel.
In addition, deregulation also reduced the barriers to
competition, airlines expanded their operations — offering more
flights to more destinations.
How do we fix this?
Whether you think things are good or bad, there should be
agreement that the flying experience can be better. For one
thing, the metrics by which airlines grade itself and its
executives should change.
“In the airline industry executives care about how low their
costs are, how high their yields are, how many aircraft they
have, and how many cities they serve,” Harteveldt said. “There’s
a divorce between the customer and the airline because there are
no customer-based metrics by which airline executives are graded
whether it’s by their board or by Wall Street.”
Instead of trying to be the biggest, Harteveldt believes airlines
should say, “we don’t care what size we are an airline as along
as we are generating the most profit per passengers or have the
most customer loyalty or highest marks for customer
It would certainly be an outside of the box move for airlines to
move beyond their traditional metrics for success. However,
Harteveldt and Bhaskara point to Southwest, JetBlue, and Delta as
airlines that have moved towards distinguishing itself from
rivals by offering superior service and performance.
At the end of the day, our experience on board America’s airlines
is as much dictated by their business strategy as it is our
consumer choice. Ultimately, the control is in the hand of the
flying public. If there’s one thing the airline industry has
learned over the years, it’s that there is no instrument of
change more powerful than a consumer’s pocketbook.