By Joe Nocera, Bloomberg View
IF YOU’RE AN airline passenger of a certain age, you remember what it was like in those years before 1978. You remember the expansive legroom (36 inches from seat back to back rest!), the empty middle seats (the typical plane was around 60% full), the hot meals (served with metal knives and forks), the lack of fees, even the ease with which you could glide from the ticket counter to the airplane (no Transportation Security Administration!). Though the airline industry had lost its sheen of glamor by the 1970s, flying was still more pleasant than not.
Then came 1978, when the administration of President Jimmy Carter deregulated the industry. The theory, propounded most forcefully by Alfred Kahn, a Cornell University economist who was chairman of the now-defunct Civil Aeronautics Board, was that freeing airlines from the shackles of regulation would bring about competition and lower prices.
He was right about one thing: Ticket prices have fallen almost in half, from an inflation-adjusted average of $651 in 1980 for a domestic US round trip to $344 last year. That’s no small thing.
But oh, have passengers relearned an old lesson: You get what you pay for! The airlines, realizing that they’d never make money in a deregulated environment with only 60% of their seats filled, shrank their fleets even as they accommodated more passengers. By 2016, the industry-wide load factor had increased to nearly 85%, and the empty middle seat was rare.
Competition is a different story. From the dozens of airlines that sprouted after deregulation, the industry has consolidated and consolidated again, until today that are only four major US airlines left: United Airlines, Delta Air Lines, American Airlines, and Southwest Airlines. They started adding fees. They put seats three, four, five inches closer together than they’d been prior to deregulation.
When Dr. David Dao was dragged off a United flight in April after adamantly refusing to give up his paid-for seat — followed a few weeks later by a brawl in the airport in Ft. Lauderdale, Florida, after Spirit Airlines canceled hundreds of flights, stranding passengers for days — I got to wondering about how we got to this point. When did the airlines start making the changes that have transformed air travel into such misery? Which airlines led the charge? What external events propelled things along? With travelers ever eager to book the cheapest possible fares, is there any prospect of improvement?
What follows is one man’s attempt to document the key moments in the degradation of airline service. In a recent visit to Bloomberg’s New York headquarters, Doug Parker, American’s chief executive, said that “the industry has finally gotten to a rational model.” True enough. For better and for worse.
Eastern Airlines is first to reduce seat pitch — the distance from the front of the back rest to the seat back in front of the knees — to 33 inches. Adds five extra rows in coach.
Average domestic round-trip fare: $651.03
Domestic airlines’ combined net loss: $225 million
Most major airlines adopt 31 or 32 inches as standard seat pitch in coach. Eastern Airlines liquidated.
Average round-trip fare: $507.57 Airlines’ net loss: $1.9 billion
United introduces Economy Plus seats as free perk for its most frequent fliers. Adds back five inches of legroom. Northwest Airlines passengers stranded on tarmac during Detroit blizzard, many without food, water or working toilets.
Average round-trip fare: $430.50 Airlines’ net profit: $8 billion
American Airlines launches doomed effort to market superior comfort, removing 6.4% of coach seats to give passengers three extra inches of legroom. Promotes move as “More Room in Coach.” Airlines bump 1.2 million passengers due to overbooking, highest on record.
Average round-trip fare: $438.53 Airlines’ net profit: $4.8 billion
September 11 terror attacks cause 30% drop in air-travel demand. Transportation Security Administration (TSA) created by Congress. Security measures tightened. Sharp objects banned, including airline dinner knives. Airlines temporarily stop serving meals. Continental increases reservation change fee from $75 to $100. United reduces fleet by 74 planes. Trans World Airlines (TWA) files for bankruptcy. TWA bought by American.
Average round-trip fare: $394.88 Airlines’ net loss: $10.7 billion
Delta installs some coach seats with 30-inch pitch. American charges $50 for “overweight” luggage. TSA insists that elite fliers go through screening. US Airways files for bankruptcy. United files for bankruptcy.
Average round-trip fare: $364.40 Airlines’ net loss: $14.6 billion
US Airways eliminates hot meals on transcontinental flights. Begins selling in-flight food. Delta charges $10 for pizza. Northwest sells sandwich boxes for $10. Delta eliminates pillows. Continental reduces fleet by 67 planes. US Airways emerges from bankruptcy.
Average round-trip fare: $360.36 Airlines’ net loss: $2.0 billion
American eliminates “More Room in Coach.” Adds back seats. New seat pitch: 31 inches. American eliminates free food in coach. Northwest charges $5 fee to make phone reservation, $10 to reserve at airport. Airlines begin adding “fuel surcharges” to offset rising fuel prices. US Airways files for bankruptcy for second time.
Average round-trip fare: $340.81 Airlines’ net loss: $8.6 billion
United abandons free Economy Plus, begins selling $299 annual subscriptions. United begins charging up to $99 for exit row seats. US Airways eliminates hot meals in first class. America West buys US Airways, keeping US Airways name. Northwest files for bankruptcy. Delta files for bankruptcy.
Average round-trip fare: $336.80 Airlines’ net loss: $27.6 billion
Northwest inaugurates “Coach Choice,” charges $15 for aisle seats. Shoe removal required by TSA while going through security. TSA bans liquid bottles over three ounces. American Airlines plane sits on Austin tarmac for nearly 10 hours after weather diversion. United emerges from bankruptcy with 30% fewer employees and 20% fewer planes.
Average round-trip fare: $355.30 Airlines’ net profit: $16.5 billion
Spirit Airlines becomes first US ultra-low-cost carrier. Charges for everything: $10 for first two checked bags ($100 for third bag); $2 for soda or water; $5 booking fee; up to $20 for a seat assignment. Seat pitch is 30 inches. Northwest charges $25 to stand by. American charges $15 to change seat assignment if the ticket isn’t booked online. Seat manufacturer Acro Aero develops non-reclining seats with ultra-thin backs. United reduces its fleet by 100 planes. Northwest emerges from bankruptcy with 33% reduction in work force and 40 fewer planes. Delta emerges from bankruptcy with 20% reduction in work force, 17% fewer planes.
Average round-trip fare: $343.93 Airlines’ net profit: $7.9 billion
In six months, oil rises from $90 a barrel to $147. United announces $25 fee for second checked bag. United ups reservation change fee from $100 to $150. United eliminates free pretzels. American adds $15 fee for first checked bag. US Airways adds $2 fee for nonalcoholic beverages, including water. Delta charges $3 for curbside check-in. United begins charging for Economy Plus seats. United and US Airways add $50 fee for first checked bag. Delta joins others in adding checked baggage fees. Southwest becomes only airline with free checked bags. Fuel surcharges rise as high as $60 per ticket. JetBlue charges $7 for pillow and blanket. Oil drops from $147 a barrel to $30.28 by end of year; fuel surcharges remain. Delta and Northwest merge.
Average round-trip fare: $354.58 Airlines’ net loss: $26.2 billion
Recession causes 10% drop in passenger demand. US Airways drops fees for nonalcoholic beverages after other major carriers decline to follow. Legacy airlines add $10 “busy travel day” fee for Nov. 29, Jan. 2, and Jan. 3. Southwest Airlines adds $10 “Early Bird Check-In” fee. Allows passengers to cut to the front of the boarding line. United and Continental charge $125 to take pets onboard. Record 1,031 flights spend more than three hours on tarmac before taking off. Government intervenes, requires airlines to let passengers deplane after three hours on the tarmac.
Average round-trip fare: $320.34 Airlines’ net loss: $3.4 billion
United adds $19 priority boarding fee. Other airlines follow. Spirit adds $30 fee for carry-on bags, $45 if checked at gate. Spirit reduces seat pitch to industry-low 28 inches. Retrofits jets with non-reclining seats. Continental begins charging for an exit-row seat. Continental is last legacy airline to eliminate free food. Delta charges $20 to make phone reservation. TSA mandates that belts be removed before going through security. United buys Continental.
Average round-trip fare: $346.84 Airlines’ net profit: $3.1 billion
Department of Transportation requires airlines to refund baggage fee if luggage is lost en route. United adds $75 “close-in” fee for frequent flyer awards used within 21 days of travel. American Airlines files for bankruptcy.
Average round-trip fare: $365.92 Airlines’ net profit: $847 million
American adds extra seat to every row of Boeing 777s, shrinking width from 18 or 18.5 inches to 17 inches. Airbus develops smaller “Space-Flex” lavatories so airlines can add extra row of seats in rear of plane. Delta charges $6 to watch in-flight movie. Department of Transportation passes rule forcing airlines to disclose full cost of tickets, including fees.
Average round-trip fare: $370.71 Airlines’ net profit: $548 million
United raises reservation change fee from $150 to $200. Other airlines follow. United installs “slim-line” seats previously used only by the low-cost airlines. Seatbacks two inches thinner. Delta takes delivery of new Boeing plane with six extra seats. To make room, bathroom counter eliminated. Airline load factor reaches 83%, the highest since 1945. American Airlines merges with US Airways, emerges from bankruptcy.
Average round-trip fare: $373.89 Airlines’ net profit: $5.2 billion
With price of fuel low, some airlines rename “fuel surcharge” as “carrier charge.” Delta raises reservation change fee on some international flights to $400. American charges $450 for bags weighing over 71 pounds on some international flights. Spirit raises fee for checking bag at airport to $100; charges $100 for flights booked within six days of travel. Argument breaks out on United flight to Denver over the use of “Knee Defender” device that lets passengers block reclining of seat in front. Pilot diverts flight to Chicago.
Average round-trip fare: $381.43 Airlines’ net profit: $9.8 billion
Representative Dan Lipinski, an Illinois Democrat, files bill to prohibit airlines from charging for access to bathrooms.
Average round-trip fare: $367.81 Airlines’ net profit: $23.8 billion
Department of Transportation reports that revenue from baggage fees totals $4.2 billion in 2016. Revenue from reservation change fees hits $2.9 billion. Airline industry employment reaches 690,100, up 18% from 2010 low but 8% below the 2000 peak of 753,600. US airlines carry record 823 million passengers — up from 666 million in 2000.
Average round-trip fare: $344.22 Airlines’ net profit: $13.4 billion
American announces it will reduce seat pitch on certain seats in new Boeing plane to 29 inches. Bowing to complaints from employees and customers, American scraps 29-inch seats, but says all seats in new plane will have 30-inch pitch. With most seats at 32-inch pitch, Southwest and JetBlue now offer more legroom in coach than United, American, and Delta. Delta offers free meals on certain long-haul flights. American follows suit. Homeland Security Secretary John Kelly says that TSA might ban laptops and other devices from the passenger cabin.
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