Sacrifice for strong airline industry
Customers, cities might not appreciate changes that help keep carriers profitable
12 November 2012
Las Vegas needs a healthy aviation industry to thrive, so it’s encouraging to see airlines posting profits in their third-quarter earnings.
The unfortunate reality, however, is that in order to be profitable, many companies have had to use tactics that aren’t particularly popular with customers or tourism-dependent cities like ours.
Several airline executives have advocated for capacity control for years, but only recently have they begun to effectively practice what they preached. The result for cities is a flat or downward trend in passenger numbers. For consumers, it’s planes filled to capacity.
Passenger counts at McCarran International Airport are up less than 1 percent for the first three quarters of 2012.
Passenger counts are flat because the number of seats airlines are bringing into the Las Vegas market is flat. While the tourism industry would love to see more planes coming in, the airlines have tempered their enthusiasm.
If there’s a silver lining to all this, it’s that Las Vegas is better off than most cities. Airlines are using new methods to increase capacity while sustaining profitability with new tactics.
Unfortunately, some of the new approaches won’t sit well with customers.
Allegiant Air and Southwest Airlines, two carriers that are very important to Las Vegas, have fewer flights than they did a year ago but more seats to the market.
Allegiant flies more high-capacity Boeing 757 jets now, and Southwest uses its higher-capacity Boeing 737-800 planes a lot in this market. Both are in the middle of aircraft interior remodeling projects to increase the number of seats in their standard planes. Allegiant also has long-term plans to introduce more fuel-efficient and higher-capacity Airbus jets to its fleet while Southwest will take delivery of more efficient next-generation 737s.
Allegiant and Southwest officials say passengers won’t notice a difference in the new seating configurations — passengers will lose a couple of inches, they say — but customers can’t be happy about being on an Allegiant MD-80 jet with 16 more people or on a Southwest 737 with six more.
Another profitability tactic that helps airlines but makes customers grumpy is ancillary fees. They are favored by Allegiant and Spirit Airlines, the fastest-growing domestic carrier at McCarran.
Many customers holler and vow never to fly airlines that use them, yet planes continue to fly full.
Spirit this month increased its carry-on baggage fee to $100 when purchased at the gate. The airline said it’s a profitability measure that isn’t designed to take money out of customers’ pockets. Spirit officials say they’re trying to push customers to plan ahead and check bags.
That way, the boarding process can be more orderly and planes can leave on time, a customer satisfaction measure that is one more piece of the new normal in air travel.
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