Bait and switch(sethgodin.typepad.com)
sethgodin.typepad.com
Bait and switch
http://sethgodin.typepad.com/seths_blog/2008/07/bait-and-switch.html
47 comments
The government is a big part of the problem. The airlines can't do much to control the ground experience in government airports. That's where the security hassles, bag delays, long lines, and uncomfortable waits occur. The airlines could better differentiate themselves if they had more control over the total travel experience.
Also, did you know that the US blocks foreign ownership of airlines? That capital and competition would help too.
Also, did you know that the US blocks foreign ownership of airlines? That capital and competition would help too.
Except that the example given was Air Canada, which the last time I checked was indeed a foreign-owned airline. This is a global problem right now, and it's based on fundamental economics. Airlines are selling a commodity product in a competitive market at a time where operation costs are rising steeply. You can't "compete" your way out of that. Things won't stabilize until flight pricing comes to equilibrium again.
I was checking flights recently and found that a one-way trip to London would cost $950. For both flights of a round-trip it would cost $750. Both plus taxes of course.
It is cheaper for me to book a round trip and just not take the return flight then to fly one way. Huh?
It is cheaper for me to book a round trip and just not take the return flight then to fly one way. Huh?
It's an attempt at price discrimination by the airlines.
If you are moving to London for the long term, you'll pay $950 without thinking about it. If you are going on vacation, you might be price sensitive. It worked much better before the internet.
If you are moving to London for the long term, you'll pay $950 without thinking about it. If you are going on vacation, you might be price sensitive. It worked much better before the internet.
Airline pricing is all kinds of wacky.
A friend of mine was trying to get round trip tickets from city A to city B recently. He found that it was significantly cheaper to purchase flights from city Z to B with a layover in A. All the flights between A and B were the same, but for some reason adding an extra destination of Z made it cheaper.
Airlines are in huge trouble from factors outside their control. They failed at being in control of their own destiny, and allowed other people/companies to control them.
A friend of mine was trying to get round trip tickets from city A to city B recently. He found that it was significantly cheaper to purchase flights from city Z to B with a layover in A. All the flights between A and B were the same, but for some reason adding an extra destination of Z made it cheaper.
Airlines are in huge trouble from factors outside their control. They failed at being in control of their own destiny, and allowed other people/companies to control them.
To add to what other commenters have already stated: the largest proportional purchasers of one way tickets are business travelers. Not coincidentally, business travelers are also the least price sensitive.
Sometimes, but be careful.
If you skip the first flight intending to only take the return flight, some (all? just Mexicana?) airlines won't honor your ticket, and they won't return your money either. That's stealing.
If you skip the first flight intending to only take the return flight, some (all? just Mexicana?) airlines won't honor your ticket, and they won't return your money either. That's stealing.
I had a pretty horrible experience with an airline recently (I won't regale y'all) and it has had me thinking about ways to fix air travel in the US. I had a few ideas on how an outside company might help, but I don't think they're actually tenable. Will it take the collapse of several major airlines for someone on the "inside" to fix stuff? The article posted here a while ago about Alaskan was pretty heartening.
One of the worst thing about airline fees is that online searches on travel sites don't always reflect required fees, such as international fuel surcharges. This makes price rankings suspect, is unfair to airlines which are up-front about these costs or build them into the ticket price, and adds a burden to ordinary people, who have to hunt through the conditions to make sure the price is as advertised.
What I don't understand about the airlines is the completely arbitrary weight limit/fee structure.
Why is it that if I have two bags, one weighing 60 lbs. and one weighing 40 lbs. do I get charged an excess weight fee; yet if both those bags weighed 50 lbs. I would incur no penalty.
One ticket agent explained the issue was related to fuel consumption, but charging me for my bag does not make the bag weigh less (and let's not mention my above point that the total weight of the bags -- if distributed evenly -- would cost me nothing extra).
Another has explained it as being an issue with weight distribution, but I'm sure if they put one heavy bag on the left (or front) for two light bags on the right (or back) that the overall weight would distribute fairly even (not exact, but this is a jet airliner not a game of Jenga).
Truly its sad that the airlines have to resort to such penny-pinching measures.
Why is it that if I have two bags, one weighing 60 lbs. and one weighing 40 lbs. do I get charged an excess weight fee; yet if both those bags weighed 50 lbs. I would incur no penalty.
One ticket agent explained the issue was related to fuel consumption, but charging me for my bag does not make the bag weigh less (and let's not mention my above point that the total weight of the bags -- if distributed evenly -- would cost me nothing extra).
Another has explained it as being an issue with weight distribution, but I'm sure if they put one heavy bag on the left (or front) for two light bags on the right (or back) that the overall weight would distribute fairly even (not exact, but this is a jet airliner not a game of Jenga).
Truly its sad that the airlines have to resort to such penny-pinching measures.
The thing that drives me mad is that if my bag is over 50lbs, I have to pay. Yet someone who weighs 200lbs (60 more than I do) can fly for the same price. You should be charged for total weight of the stuff you put on the airplane!
The thing that drives me mad is that if I want legroom, I have to pay. Yet someone who's short (feet shorter than I am) can get legroom for the same price. You should be charged for the total amount of legroom you get!
My understanding is that heavier luggage requires special handling (and is thus more expensive) due to concern for safety of the people who handle them.
Well again its an arbitrary distinction, Is that 51 lb. bag that much more dangerous than the 50 lb. bag. A baggage handler could easily throw their back out improperly lifting a 49 lb. bag, but at least I won't get charged for it.
It is kind of arbitrary, but unless your going to eliminate weight limits altogether, I don't really see how else you could do it.
It's funny that he mentions the TSA. It's true that the negative experience with them makes you think less of the airlines, even though logically you know it isn't their fault, in the same way that you blame Windows when an app bugs out.
But it doesn't make you think any less of any particular airline relative to their competition, because they all suffer from the same thing. Unless there's some legal way for an airline to circumvent the security lines (and I have to think there isn't or we'd already have that) there's no competitive disadvantage there.
But it doesn't make you think any less of any particular airline relative to their competition, because they all suffer from the same thing. Unless there's some legal way for an airline to circumvent the security lines (and I have to think there isn't or we'd already have that) there's no competitive disadvantage there.
Is there any research being done into electric/hybrid airplanes?
In 20 years oil costs could make flying very unpractical.
In 20 years oil costs could make flying very unpractical.
"Hybrid" is a non-starter for an airplane. It spends 99% of its time running in the "sweet spot" of the turbine performance envelope, there are no starts and stops for which regenerative braking or a switch from the turbine to some sort of electrical propulsion would help. Electrical power is problematic because batteries and other forms of electrical energy storage still suck. There are solar-electric planes being developed for long-term station-keeping tasks, but they are slow and have almost no payload capacity.
Turbine jets are basically the best thing we know of for performing this specific task. We might be able to improve the fuel they are burning, but nothing is going to replace them for the next couple of decades at least.
Turbine jets are basically the best thing we know of for performing this specific task. We might be able to improve the fuel they are burning, but nothing is going to replace them for the next couple of decades at least.
We don't really need to make airplanes that use other energy sources than petroleum, if it could be manufactured or acquired at decent cost. If it should happen that we can't, we're hosed - moving through the air at 800kph is a dream unless you've got something approaching the energy density of oil. Hydrogen could be made workable, I believe - energy density per volume is something in the region of 30% of gasoline when compressed. With radical airframe changes, we might be able to uphold the status quo.
We have a long way to go considering the efficiency of the airframes themselves. Fuel consumption could be reduced drastically if we could go a bit slower, or there would be some radical design change (think sailplanes). Most widebody airframes today look like flying buffalos, with the resulting air resistance.
Almost all air transport of people happens on the border of the transsonic regime, where air resistance is a lot higher than it could be. Reduce speed with 30%, and you'll reduce the total energy consumption by a considerable amount. One can only guess how customers would take this.
Market forces today don't look like they are convective to such change, but one can always hope that some startup is able to eat a big piece of the pie. Personally, I am very enthusiastic about companies like http://www.dayjet.com/, who specialize in slightly-expensive but pretty-painless transport.
Sadly, aviation is one of the most ass-backwards industries in the world, burdened by the largest amount of politics, subsidies, bureaucracy and regulation I've ever seen. There are definitely huge business opportunities here, but there are mountains and mountains of shit to wade through before we reach them. I believe that better personal air transport would be the way to go - better and cheaper GA airplanes. The competition and politics here are still in the world class, but not quite as cutthroat as among the airlines. And the capital requirements are survivable, and the existing airplanes are even more ass-backwards.
It says something about an area of business when the military has been driving the bleeding edge for fifty years.
We have a long way to go considering the efficiency of the airframes themselves. Fuel consumption could be reduced drastically if we could go a bit slower, or there would be some radical design change (think sailplanes). Most widebody airframes today look like flying buffalos, with the resulting air resistance.
Almost all air transport of people happens on the border of the transsonic regime, where air resistance is a lot higher than it could be. Reduce speed with 30%, and you'll reduce the total energy consumption by a considerable amount. One can only guess how customers would take this.
Market forces today don't look like they are convective to such change, but one can always hope that some startup is able to eat a big piece of the pie. Personally, I am very enthusiastic about companies like http://www.dayjet.com/, who specialize in slightly-expensive but pretty-painless transport.
Sadly, aviation is one of the most ass-backwards industries in the world, burdened by the largest amount of politics, subsidies, bureaucracy and regulation I've ever seen. There are definitely huge business opportunities here, but there are mountains and mountains of shit to wade through before we reach them. I believe that better personal air transport would be the way to go - better and cheaper GA airplanes. The competition and politics here are still in the world class, but not quite as cutthroat as among the airlines. And the capital requirements are survivable, and the existing airplanes are even more ass-backwards.
It says something about an area of business when the military has been driving the bleeding edge for fifty years.
> Reduce speed with 30%, and you'll reduce the total energy consumption by a considerable amount.
This is one of the (few?) cases where government regulation is appropriate, one airline would go out of business but if every route changed there would be a month of griping and folks would get used to it.
The re-scheduling, route planning, change in maintenance schedules, etc would be a one time cost, but if that's true I can't imagine the airlines are not secretly hoping for something like that to give them some help.
This is one of the (few?) cases where government regulation is appropriate, one airline would go out of business but if every route changed there would be a month of griping and folks would get used to it.
The re-scheduling, route planning, change in maintenance schedules, etc would be a one time cost, but if that's true I can't imagine the airlines are not secretly hoping for something like that to give them some help.
No. There are many reasons why it isn't free to just fly the airplanes slower, all have to do with the opportunity cost of time.
If an airline now flies passengers 20,000,000 miles a day (100 flights x 200 passengers a plane x 1000 miles a flight) and needs 50 planes to do it, cutting the speed at which those planes fly in half will mean that the airlines need twice as many planes. The fixed costs on the planes are the same whether they are going 500Mph, 300Mph, or sitting on the ground, either way the company is still paying the lease or mortgage on the plane. Flight attendants and pilots have to be paid regardless of how fast the plane is moving.
Additionally, for passengers, arriving later isn't merely an annoyance to be endured, it will change decisions. People have alternative uses of their time, mechanics can't fix cars when they are in the air, doctors can't save lives. The (possible?) reduction in ticket cost wouldn't adequately compensate some people for the additional time that they lose. What your proposal just did was to take a private decision (for the airlines - how fast do I want to fly my planes, for the consumer - which ticket do I want to buy from a market of airlines that compete to get me there the fastest, cheapest, or some combination) and have taken that choice away by making a government mandate.
If an airline now flies passengers 20,000,000 miles a day (100 flights x 200 passengers a plane x 1000 miles a flight) and needs 50 planes to do it, cutting the speed at which those planes fly in half will mean that the airlines need twice as many planes. The fixed costs on the planes are the same whether they are going 500Mph, 300Mph, or sitting on the ground, either way the company is still paying the lease or mortgage on the plane. Flight attendants and pilots have to be paid regardless of how fast the plane is moving.
Additionally, for passengers, arriving later isn't merely an annoyance to be endured, it will change decisions. People have alternative uses of their time, mechanics can't fix cars when they are in the air, doctors can't save lives. The (possible?) reduction in ticket cost wouldn't adequately compensate some people for the additional time that they lose. What your proposal just did was to take a private decision (for the airlines - how fast do I want to fly my planes, for the consumer - which ticket do I want to buy from a market of airlines that compete to get me there the fastest, cheapest, or some combination) and have taken that choice away by making a government mandate.
As a supporting data point here, one of the things which makes SWA such a profitable airline (in addition to its amazing luck using futures to hedge its fuel costs) is that it has some of the fastest turnaround times in the industry. Its planes spend their time flying, not on the ground waiting to be unloaded/loaded. This lets them get in more flights that other airlines with comparable fleets.
This is most definitely the first time I've ever heard anyone say the the problem with air travel today is too little government interference.
> This is one of the (few?) cases where government regulation is appropriate, one airline would go out of business
Huh? If it actually produces cost savings, folks who valued that cost savings more than time would flock to any airline that did it. If it doesn't, then why is govt regulation appropriate?
I doubt that minor changes in flight time matter to a lot of passengers, but since it's not my money at risk if I'm wrong, it's inappropriate for me to demand that others try.
If you think that you can run an airline better, do it. If you're right, you'll get rich and force existing airlines to either change or die. However, if you're not willing to risk your money, why should someone else be forced to risk theirs?
Huh? If it actually produces cost savings, folks who valued that cost savings more than time would flock to any airline that did it. If it doesn't, then why is govt regulation appropriate?
I doubt that minor changes in flight time matter to a lot of passengers, but since it's not my money at risk if I'm wrong, it's inappropriate for me to demand that others try.
If you think that you can run an airline better, do it. If you're right, you'll get rich and force existing airlines to either change or die. However, if you're not willing to risk your money, why should someone else be forced to risk theirs?
You can run a turbine engine on ethanol. It's just that the existing ones aren't certified for it.
The first paragraph is spot on, but the second is just wrong. Turbojets fly much faster than needed, for the convenience of the passengers. Drag goes as the square of speed, so per-distance fuel economy scales as the inverse of the trip time. One certainly can do much better than a turbojet simply by swapping the fan for a larger geared propeller and flying at half the speed.
Jets can also fly higher, which means smoother flights.
Actually, that's an issue of design choice, not fundamentals. Turbojets fly higher because they fly longer (so don't worry as much about inefficiencies due to climbing to alititude) and want to fly faster (up to the tropopause, temperature is dropping which results for mildly complicated reasons in power dropping more slowly than drag does).
But there's nothing inherently "lower" about a propeller. They work just as well at altitude as they do as sea level. It's just that market forces have dictated that props are better suited to low-altitude, low-speed commuter routes. But you could design a high altitude prop without difficulty.
But there's nothing inherently "lower" about a propeller. They work just as well at altitude as they do as sea level. It's just that market forces have dictated that props are better suited to low-altitude, low-speed commuter routes. But you could design a high altitude prop without difficulty.
Really? Is it an urban legend that jet engines work better at high altitudes than propellers? I wouldn't be surprised. Anyone else know about this?
Pretty much. There are actually some fancy solar designs for low-speed unmanned cruisers that work up to the 80-100kft level (solar cells don't lose power with altitude, so they don't have the tropopause limitation that oxygen breathing engines do). Those things are all about efficiency, and they pick props for the same reasons that other efficiency designs do. Jets are comparatively more efficient at high speed (rather: high-radius prop losses grow with speed faster than low-radius fans), not at high altitude per se. But since tropopause-altitude is a design goal for speed designs, these two have traditionally been interchangeable.
As far as credentials go, I'm the author of the "YASim" dynamics model that FlightGear (http://www.flightgear.org) uses. So while I'm a hacker and not an aerospace engineer, I do have at least a little domain expertise.
As far as credentials go, I'm the author of the "YASim" dynamics model that FlightGear (http://www.flightgear.org) uses. So while I'm a hacker and not an aerospace engineer, I do have at least a little domain expertise.
I might have been a bit too broad in stating that the turbojet is the best at what it does, but "speed" is a design characteristic just like any other and alternatives will need to come close on the speed side or else anything they may provide on the economy side of the equation will be ignored.
Turbojets fly as fast as is practical given the market demand they are serving. If airlines offered people the choice of flying half as fast for a lower price the fast flight would still win (up to a certain point, as the supersonic option showed when Concorde was still flying.)
You could do even better by putting your turbofan onto a rigid airship, but that isn't going to happen either :)
Turbojets fly as fast as is practical given the market demand they are serving. If airlines offered people the choice of flying half as fast for a lower price the fast flight would still win (up to a certain point, as the supersonic option showed when Concorde was still flying.)
You could do even better by putting your turbofan onto a rigid airship, but that isn't going to happen either :)
Good freaking luck trying to sell half-speed flights. Maybe as part of a national security deal - less oil used for airline fuel due to slower flights in exchange for removing some painful, slow, ineffective security screening.
You'd never buy a half-speed flight. I'd buy a half-speed flight from Tampa to NYC if it were 2/3 the price of the jet flight. My poorer friends would buy the route on a 1/4 speed airship if it were cheap enough. People have different sensitivities to time vs. money.
I might even pay more for a trip by Zeppelin...
Why not? They can offer those flights for lower prices, so people willing to go for a longer, cheaper flight can choose to do so. If they become popular, then they've gotten new market niche.
OP overlooks one critical counterexample: Southwest Airlines.
They are excellent. They pretty much blow everyone else away. I won't fly anyone else anymore.
Why?
- I can buy one way tickets and get full credit back anytime
- They are very often on time
- Customer service is excellent, they are upbeat and positive
- The website is excellent
- Their prices are very competitive
- I can choose my own seat away from the children and talkers
My advice to any other airline: Figure out what Southwest is doing and do that too. Stop complaining and looking for government bailouts. If one airline can be successful (60+ consecutive profitable quarters, growth, and raving fans), more than one can do it.
They are excellent. They pretty much blow everyone else away. I won't fly anyone else anymore.
Why?
- I can buy one way tickets and get full credit back anytime
- They are very often on time
- Customer service is excellent, they are upbeat and positive
- The website is excellent
- Their prices are very competitive
- I can choose my own seat away from the children and talkers
My advice to any other airline: Figure out what Southwest is doing and do that too. Stop complaining and looking for government bailouts. If one airline can be successful (60+ consecutive profitable quarters, growth, and raving fans), more than one can do it.
Up to now, it has not hurt them in their fuel hedging:
http://www.247wallst.com/2007/04/southwest_airli.html
http://www.247wallst.com/2007/04/southwest_airli.html
Yep, enjoy it while it lasts. A good chunk of their profits comes from that hedging, so when they have to redo their agreements, the belt will probably tighten.
I wouldn't be so sure. Even after 9/11, Southwest had minimal layoffs. Source: http://tinyurl.com/5mbq9y
While I certainly agree that fuel hedging has played a large role in their current short-term profitability, there's a lot more at work than well timed utilization of financial derivatives.
While I certainly agree that fuel hedging has played a large role in their current short-term profitability, there's a lot more at work than well timed utilization of financial derivatives.
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I worked for US Airways in engineering, and enormous man hours were wasted using the proprietary mainframes that ran everything. Southwest doesn't have the legacy systems that the legacy airlines have, and the legacy airlines can't afford to upgrade their systems that work.
Even though the prices are great, #1 and to a lesser extent #3 are why I will ONLY fly SouthWest.
In short, consumer behavior isn't going to change, and airlines have no reason to change. Travel sites have the most to lose from these fees and the greatest ability to cause a change. If this trend is going to reverse, it has to come from them.