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Friday, November 11, 2005

Industry flying backward

One of the industries that have kept on moving backward rather than forward is the airline industry. The speed of airplanes has remained the same since commercial flight was made viable. The Concorde which was the only advancement in terms of speed has been withdrawn. Add in more rigorous (often pointless) security checks at airports and crowding of old runways; total air travel between many cities (say between New York and Boston) takes longer than train travel.

Service quality has also taken a backward move. The low cost ($200) airlines don’t serve any food; the high cost ($600) airlines serve half a can of coke and a 10cents nut sachet. The expressions of the cabin crew in most US airlines show the dislike they have for having to serve (???) passengers while being unsure about their jobs due to their employer’s owes.

Regarding the cost of air travel, results are mixed. I don't have historic data points in the US. But in India a full fare economy class flight between Delhi-Mumbai cost ~Rs 5500 in 2002. The same now costs close to Rs 9000. The low cost airlines in India offer full fare flights for the same distance for ~Rs4500. However, international air travel has become much cheaper.

So what’s ahead for the airlines industry? Will it become more comfortable, faster and cheaper? Highly unlikely. Boeing, Airbus and other manufacturers are focusing more on reducing cost of operations for the airlines, while airlines are busy filing bankruptcies. My forecast is that the airlines and the airplane manufacturers will work together and result in the following for higher efficiencies:
1. Aircrafts will be so designed such that passengers can travel standing (like in trains and buses)
2. Airlines, like credit card companies, will punish customers heavily for mistakes. So if you press the call air hostess button without a good enough reason, they will charge your credit card.
3. Airlines will not allow any free baggage and charge extra for carrying any. (Incidentally charging passengers for extra load is currently the most profitable for airlines as they don’t have any extra cost for carrying these)
4. Airlines may also charge the overweight people based on their weight in excess of the free body weight allowed.
5. They will start asking money from passengers for seemingly great but actually dubious reasons (like for Gift A Child Fund, Green Fuel Fund etc.)
6. Airlines will also scan checked-in baggage, and declare as lost, those bags, which may have more costly goods inside than the standard amount refunded to passengers for baggage loss.
7. Like in airport shops, the narrow aisles will have a row of ceramic duty free shopping items so that passengers, while navigating their way to toilets, may knock-off a few and be forced to pay for those .

Is there any hope for the consumers in this industry?

6 comments:

Thomas said...

The American airlines have already implemented your #4.

The others won't be long behind!

Kapil said...

I have never ever understood how airlines make money with such high-cost of operations. A car costs to much money just to maintain and operate. Imagine the cost incurred in just pulling away the airplane from the runway to the hangar itself is a big one! I am not surprised most of the airlines will shut-down finally.

And on saving costs are concerned. Airlines should share traffic. So if there is one flight which is flying only half-full, they should move those passengers to another airline who can be full. Thus maxmizing the passenger head count on every flight.

green said...

Jet Airways is doing your #5

And to Kapil suggestions, yeah Airlines are sharing passengers,most of the time the intercontinental flights will be like AirIndia-AirFrance-Delta ..etc. It will be operated by one of the airlines but will have passenger of all the three airlines. It ensure full occupancy.

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