It can’t auto-ignite, even at broiling temperatures near 400 degrees Fahrenheit when sitting in the wing tanks on Persian Gulf tarmacs in midsummer, but must still be explosive enough when ignited to power super-high-thrust jet engines without fail.Three Unimaginable Things That Changed Everything
Next time you’re shuffling shoeless through security toward the scanner imaging machine, or groping for a credit card to buy a $3 package of chips, don’t blame it all on the mean and greedy airlines. Save some blame for three things that nobody in his right mind could have imagined happening to commercial aviation before September 2001.
September 11 itself—more precisely, its security-consumed after-math—infused the whole journey with a new kind of dread and disquietude. Then came the late-decade surge in the price of jet fuel—a shock that triggered a near panic of cost-cutting and efficiency-seeking that cemented commercial aviation’s “business, all business” future. Meanwhile, the decade after 9/11 saw the remarkable revival and ascension of the low-cost airlines, whose simpler “no-frills” business model influenced and terrified their old-school competitors.
Not that change—even turbulent change—was something new to commercial aviation, but the US airline industry and its customers had never experienced anything like the tectonic shocks the decade had generated. These three things changed everything, for good and ill, leaving behind a new normal likely to last for years to come.
1. From Daddy Moments to Groin Checks
Before 9/11, flying was different—in ways everyone remembers through a different lens. For me, it was the “Daddy moments.” When my kids were young, I was working in the Clinton administration’s Department of Transportation, trying to open global aviation markets so that US airlines could compete more freely around the world. Some weeks, this quest for “Open Skies” had me spending literally more time in the air than on the ground. Finally returning to Dulles, I’d normally just grab a cab home, except on those rare and wonderful occasions when, if preschool was over and it was not yet bedtime, my ever-loving wife would drag the brood out to the airport to welcome me back. As I trudged up the jetway into the brightness of the busy terminal, I’d hear the excited squeal: “Daddy!” Then the leap into outstretched arms, followed—after the 30-second interval that protocol demanded—by “what did you bring me?” A column by travel writer Harriet Baskas jogged my memory of those jetway greetings. It was a little thing, but it made arriving a true homecoming. Sadly, it’s one of the casualties of post-9/11 security; now only ticketed passengers are allowed past the screening area.
September 11 is said to have “changed everything,” but nothing so profoundly as everyday air travel. From the “enhanced” screenings and baggies for toothpaste, from unlaced shoes, unbelted waists, and locked cockpits to the new gauntlet we’re forced to run from airport door to airplane seat, the whole texture of the experience suddenly morphed into something alien. After 9/11, we didn’t so much fly as we were “flown” as a kind of fragile, unwilling, self-loading cargo. It’s no mystery why air travel dropped nearly a third in the immediate aftermath of the attacks.
The decade after 9/11 was our “Security Decade.” Flying was not just a hassle; it became downright scary. Boarding a plane was a risk-defying act. Orange Alerts, black-clad police strolling past the Cinnabon counter cradling automatic weapons, nervous flight attendants, security “experts” who never tired of telling us how anxious the bad guys were to bring down planes full of helpless passengers, how it was “not a matter of if, but when.” We were targets and suspects at the same time. Looking back, for air travelers, there were really three overlapping phases to our Security Decade. Call them Panic, Overkill, and finally, Adaptation.
Panic and First Response
With only slight overstatement, aviation security before 9/11 has been called, in expert Bruce Schneier’s phrase, “Security Theater.” Since the 1970s, it was handled by private contractors hired by the airlines, with an assist from local airport law enforcement. It was all under the aegis of the FAA, but the big security-screening contracts went to the lowest bidders—the ones who paid near minimum wage and didn’t always look too hard at screeners’ prior employment, or even their criminal records. FAA rules didn’t even require criminal record checks for all screeners unless applicants had “specific deficiencies” in their employment histories like long, unexplained gaps. Even convictions for violent felonies—even air piracy (hijacking) and armed robbery—didn’t necessarily disqualify applicants if the crimes were more than 10 years old.
What did they expect? At some of the nation’s largest airports, as GAO reported to Congress nine days after the 9/11 attacks, screeners sometimes made less money than they would flipping burgers at the airport fast-food joint at the other end of the terminals they were supposed to be guarding. And the turnover rate was astronomical. At a half dozen major airport hubs in 1999, the average screener lasted less than a year, sometimes only a few months. At big airports like Atlanta and St. Louis, annual turnover rates approached 400 percent.
The reliability of the screening reflected the level of professionalism. The FAA measured it directly by testing how often officers missed a standard “threat object”—initially, think dummy guns or grenades in uncluttered carry-on bags—as it passed through. In 1987, some 20 percent of threats got through undetected—and that may well be the best it’s ever been since. When more realistic test objects like simulated improvised explosive devices were later used, reliability proved to be even worse—so much so that the GAO stopped publishing or discussing test results on the grounds that they were “sensitive security information,” as claimed in a 2001 GAO report. (GAO had acknowledged “room for substantial improvement in airport screening.”) Detection failure rates for screening in 2004 and 2005 were reported to be as high as 70 percent at some airports, though TSA said these later tests were designed to be much tougher, so as to ferret out points of screening vulnerability.
Meanwhile, airports themselves were “porous.” Testers from DOT’s Inspector General’s office in 1998 and 1999 succeeded 68 percent of the time in sneaking into secure areas of eight major airports, even managing to climb into the cockpits of parked jets more than 100 times. Just two weeks after the 9/11 attacks, when Congress understandably demanded to know what had gone wrong, GAO’s response was a classic of understatement: “Limited action … has too often characterized the response to aviation security concerns” and “more needs to be done.”
What followed was a massive game of security catch-up played at lightning speed, at least by government standards. Created in just two months, the Transportation Security Administration—in its own words, the “largest civilian undertaking in the history of the US government”—was approved in the Senate by a vote of 100 to 0. Within a year, the new federal security force, initially numbering 45,000 people, took over at nearly 450 commercial airports and started screening every checked bag. Ten years later, the TSA employed roughly 60,000, with an annual budget of more than $8 billion.
The government also rushed to crank up a languishing effort to spot and stop would-be terrorists before they got off the ground. That meant keeping lists—no-fly lists, watch lists, “selectee” lists. The list of real bad guys, the “no-fly” list kept by the FBI, had only 16 names on it on September 10, 2001. Within 60 days, responsibility for that list had shifted to the FAA, and it had grown to 400 names, then to 1,000-plus names by the end of 2002. A decade later, the number of “no-fliers” had reportedly ballooned to 21,000 (though only about 500 Americans). More impressive still was the much larger “Terrorist Watch List” managed by the FBI’s Terrorist Screening Center. By summer 2011, this list of some 400,000 names bedeviled thousands of air travelers with common names—like the late US senator Edward H. Kennedy who shared a nickname (Ted) with an IRA bad guy and about 7,000 other American men to whom “T. Kennedy” could apply.
The passage of time after the World Trade Center attacks did surprisingly little to diminish the aviation security hyperdrive, mainly because new “real world” events kept reigniting travel fears. Just 60 days after the attacks, American Flight 587 crashed into the Queens section of New York City, killing 260. Though ruled an accident, many simply refused to believe it wasn’t terrorism. In December 2001, a scowling “shoe bomber” named Richard Reid tried to blow up American Flight 63 en route from Paris to Miami with a combination of plastic explosives (PETN and TATP) stuffed into his shoe, an event that to this day keeps us shuffling unshod across airport floors. Later that frightening spring of 2002, authorities arrested a Chicago gang member on his way back from the Middle East for allegedly planning a “dirty bomb” radiological attack. The next autumn, terrorists fired two shoulder-held surface-toair missiles at an Israeli charter jet in Mombasa, Kenya.
Each new threat kept air travelers on edge and ratcheted up the security scramble. In August 2006, authorities in London charged two dozen people with a failed plot to detonate liquid explosives on transatlantic flights; restrictions on liquids packed in carry-on bags quickly ensued. On Christmas Day 2009, a Nigerian with PETN stuffed into his underwear tried to blow up a Northwest flight from Amsterdam to Detroit and was subdued by passengers and flight attendants—ergo, “enhanced” pat-downs. Less than a year later, authorities intercepted two plastic explosive bombs packed in printer cartridges sent from Yemen on cargo planes bound for the United States; calls to screen 100 percent of inbound merchandise on cargo flights followed.
Experts competed for the scariest—albeit by nature unprovable—predictions of doom. “Only a matter of time” became the mantra. Would-be travelers called it a “hassle”—as in, “I’d prefer to drive all night to my business meeting to avoid the hassle”—but it was mostly just macho-speak for being scared. And who wouldn’t be? In the airport, taped announcements droned endless warnings that “unaccompanied bags” would be vaporized. The screening line was a place of special tension, drama, and sometimes confusion, with lots of guys with large weapons standing around. Remove your coat and disgorge your pockets and possessions and hurry up, please. Every week, frazzled travelers left more than 12,000 laptop computers at airports, mostly at screening, according to a 2008 study by Dell, not to mention $409,000 worth of loose change that rushing travelers left behind in plastic screening bins in 2010 alone.
Onboard, we were supposed to “be alert,” prepared for a cockpit death struggle, all soldiers in the “Global War on Terror.” Flight attendants “assessed” passengers as they came aboard, looking not just for “suspects” to keep an eye on, but also for a few big, strong potential allies, just in case. As it turned out, ordinary passengers were the most effective antiterrorist airborne defense—responsible for stopping not only the “shoe bomber,” but also for crashing hijacked United Flight 93 in Pennsylvania before it could reach its probable Washington, DC, target. Self-preservation is a powerful motivator.
Overkill
As the last “successful” attack on aviation receded in time, security annoyance began to eclipse security fear. Did they really need to confiscate all those nail scissors and penknives and cigarette lighters? The TSA announced its annual screening “haul” in 2006: the agency screened 708 million travelers at checkpoints and well over a half billion pieces of checked luggage and opened 16 percent (86 million) of those checked bags. The officers found close to 14 million “prohibited items” at the checkpoints—about 85 percent of them were lighters and another 12 percent were knives of unspecified size. The number of nail clippers was not disclosed.
It all started to seem just a little ridiculous. YouTube offered a near-daily diet of “reality screening” episodes. Cupcakes were prohibited no-fly substances, but only if they had a lot of icing. Too much icing looked like a potentially explosive liquid gel. Snow globes were OK only if you could stuff them into your quart-sized baggie for liquids. Airline pilots heading for the cockpit of their fully loaded jumbo jets had to surrender their penknives. Then there was the TSA “freeze drill,” where screeners practiced shutting down a breached airport checkpoint, a process that apparently involved lots of yelling “Code Bravo! Freeze!” As the New York Times’ Joe Sharkey reported, everyone within earshot, even passengers already past security, actually “froze” as though playing a game of Simon Says.
And it was all very expensive, too. In the eleven years following 9/11, missile-loaded F-16 fighter jets based at Andrews Air Force Base—the 113th Wing of the DC Air National Guard known as “The Capital Guardians”—scrambled nearly 2,000 times, almost daily on average, to intercept an errant aircraft straying over the capital’s “air defense identification zone.” And as complaints mounted about long screening waits, TSA hired more screeners. All that service isn’t free. Then there was the travel-suppressing economic impact of it all. Some 64 percent of fliers told a 2010 Consensus Research Group survey they would fly more often if security were less intrusive and time-consuming. According to the US Travel Association, the same survey found that screening hassles deterred fliers from making two to three trips per year.
Was there an end to it? More precisely, could we ever really hope to win the game of cat-and-mouse with terrorists? Few thought so. One descriptive term was “security whack-a-mole.” Here’s Bruce Schneier’s succinct “short history of airport security,” from a New York Times op-ed:
We screen for guns and bombs, so the terrorists use box cutters. We confiscate box cutters and corkscrews, so they put explosives in their sneakers. We screen footwear, so they try to use liquids. We confiscate liquids, so they put PETN bombs in their underwear. We roll out full-body scanners, even though they wouldn’t have caught the Underwear Bomber, so they put a bomb in a printer cartridge. We ban printer cartridges over 16 ounces—the level of magical thinking here is amazing—and they’re going to do something else.
Americans were willing to accept the inconvenience trade-offs, up to a point. But layered-on security procedures—a new layer for each new threat—tested our tolerance. For many, that line was crossed by “enhanced” screening—what happened if you declined the invitation to be scanned or if the scan showed an “anomaly” that needed a further look—an exercise sometimes known as “the groin check.” Thanks to the Christmas “Underwear Bomber,” just in time for Thanksgiving 2010, we were introduced to “Advanced Imaging Technology.” That meant full-body scans that displayed to a remotely located screener everything underneath your clothes. If that included an “anomaly” (think: nipple rings) or you’d rather not be scanned, you got the “enhanced” physical search—please, not a grope, just a friendly “pat-down.”
Though fewer than 3 percent of travelers got the pat-down in late 2010, according to TSA’s official blog, complaints about the new screening spiked 40 percent during the first half of 2011, and came loudly from all quarters. The scanners were dosing us with harmful radiation; the images of naked bodies seen by TSA were too explicit (new software was installed on one type of scanner to “degrade” the image to a sexless generic line drawing, though the more explicit “backscatter” scanners had to be pulled in 2013); the pat-down alternative was tantamount to assault! Passengers still had options but, as several bloggers put it, they amounted to “naked scan or grope?” Plans for a “National Opt-Out Day” went viral. A major pilots’ union, American Airlines’ Allied Pilots Association, advised members to “politely decline” the body imagers. DON’T TOUCH MY JUNK T-shirts became the rage.
With the personal honor of upstanding citizens at stake, politicians naturally chimed in. When Kentucky senator Rand Paul was detained at a Nashville TSA checkpoint for refusing a pat-down, his father, congressman and Republican presidential aspirant Ron Paul, decried “a police state … growing out of control,” where TSA “gropes and grabs our children, our seniors, and our loved ones.” In May 2011, the Texas House voted 138–0 to make it a misdemeanor for a TSA screener to “touch …” anyone “in a manner that would be offensive to a reasonable person”—until federal authorities explained that Texas could find itself a no-fly zone if TSA screeners were prevented from doing their jobs.
Even with all the media hype and political hoopla, though, everyday fliers themselves seemed to take the new security in stride. Maybe they figured that underwear bombs are hard to find without looking for them in underwear, or that hassles were to be expected in air travel anyway, or that there was simply not much point in complaining. Opinion polls were mixed, but the limit of passenger tolerance seemed to fall somewhere between machine scans (acceptable) and the full grope (not so much). A CBS News poll a week before Thanksgiving 2010 found 81 percent of travelers approving the full-body scans; 64 percent approved them a week later in an ABC/Washington Post poll. Attitudes were different, though, when it came to “enhanced” pat-downs. Half the passengers in the ABC poll said they went too far. The head of the TSA summarized passengers’ attitude this way in a New York Times report: “When somebody gets on a plane, they want to know that everybody else—O.K., maybe not themselves, but everyone else—has been thoroughly screened.”
Ten years after 9/11, an uneasy equilibrium seemed to be emerging between the fear of falling victim to terrorism and the annoyance at intrusive security. By the summer of 2012, a Gallup poll found that a majority of Americans (54 percent) thought the TSA was doing a good or excellent job handling airport screening, and 85 percent thought it was at least somewhat effective in preventing aviation terrorism. Call it grudging acquiescence for now, but what happens when we confront what one screening expert calls the “nightmare scenario”—explosives implanted inside the body of somebody willing to die to bring down a plane? A Saudi suicide bomber tried it in August 2009 in an attempt to kill the Kingdom’s counterterrorism chief. Complaints about TSA folks rummaging through our hand luggage start to seem almost quaint.
Is the security rigmarole working? It has kept lots of stuff that shouldn’t be in airplane cabins from getting there. Every day on average, the TSA says it finds four firearms in carry-on bags at airport screening checkpoints. Some have live rounds in the chamber. “There are people who are not focused on the security protocols,” the TSA administrator recently deadpanned in congressional testimony.
Adaptation
Nobody would have believed 20 years ago what we now readily accept as the price of catching a plane. It’s not all that different from standard intake procedures at county jails: check identity, match government-issued ID to intake form, pat down for weapons or contraband, remove shoes, belt, jewelry, and extra clothing layers, and stand in multiple lines until directed to stand somewhere else. True, there are some differences—you don’t have to get fingerprinted or have a mug shot to board a flight; on the other hand, jail intake might just be a little calmer—without banging bins, shouted directions, and endlessly looped security warnings.
A decade after 9/11, though, we’ve largely adapted. Along the way we’ve shed some of the loonier security measures launched in the immediate wake of the 2001 attacks. Color-coded alerts—which remained forever “orange” since the summer of 2006—have given way to a less melodramatic advisory system that highlights only specific and imminent threats. Bans on curbside bag check-in—how exactly does that stop terrorists?—are gone. And when was the last time anyone asked “who packed your bags” or if they’ve been “out of your possession”?—a quaint throwback to the days when terrorists politely requested unwitting strangers to please take a ticking alarm clock home to Mom. National Guardsmen brandishing automatic weapons in crowded airport lobbies have moved on to more pressing duties.
Overall, passenger security complaints to the TSA dropped to their lowest-ever levels in November 2011 according to Bloomberg News. Even in the wake of “enhanced” pat-downs, they were down 59 percent from their peak in May 2004. TSA says it gets complaints from only .001 percent of passengers—though that’s still a non-trivial 6,000 to 7,000 complaints a year, close to 20 every day. “Wait times” to get security-screened are at least more predictable, even as passengers avoiding new checked-bag fees dumped 59 million more carry-on bags onto the screening belts in 2010 than the year before. “Peak” rush hour wait times at the busiest airports can still exceed a half hour, but the TSA says 99 percent of passengers make it through in less than 20 minutes. A good measure of our adaptation to post-9/11 security: far fewer half-full plastic bottles of contraband water tossed into pre-security trash bins.
In large airports, the locus of security activity and, thus, security stress, has become increasingly invisible. Aside from personal carry-on bag screening, the bigger security job has moved belowground. That’s where the monster luggage X-ray machines that used to dominate airport check-in lobbies can screen 500 to 600 bags every hour and where TSA folks peering at screens in dimly lit rooms try to make the right call every single time about what’s going on your flight. We’ve all adapted, but in a quiet room in the bowels of San Francisco International, where the security folks do their job, there’s still a huge banner lining one wall, with only four words: NOT ON OUR WATCH.
RATCHETING DOWN THE HASSLE FACTOR
By the end of the post-9/11 decade, optimists could sense a subtle shift in the security zeitgeist. If the idea after the attacks was to scare the bejeezus out of us, to keep us “alert” and on edge, the ground seemed to be shifting under the weight of widespread security fatigue and a growing acceptance of the reality that security can never be absolute. All bets were off, of course, if terrorists managed another hellacious attack, but stung by public upset over groin checks and YouTube videos of eightyear-olds getting the rubber-glove treatment, officials started looking for ways to ratchet down—not up—the tension and inconvenience. Very frequent travelers willing to disclose personal data could apply for “precheck,” a program designed to speed screening of “known” travelers. Babies got to keep their booties on, young kids and older folks 75 and up rarely got frisked, and airline pilots were spared the full monty.
Even the once-heretical notion that not all passengers pose the same potential threat or merit the same intensity of screening became a legitimate topic. The core idea was straightforward: Screening would improve if TSA could pick out and focus on those folks who needed extra watching, and ease up on toddlers and grandmas and others who were searched “just to be fair.” But how to identify those slightly more suspicious characters who deserve a closer look? A majority of Americans in some polls—54 percent in a Zogby poll released in February 2011—think ethnic, even religious, profiling is OK when it comes to aviation security. But that debate—whether security profiling is ethical, Constitutional, or even effective—has a long way to go.
Are there better ways? Israeli security has made an art form of identifying potential bad guys by another method called “behavioral evaluation.” Passengers don’t even get close to the bag-screening line at Tel Aviv’s Ben Gurion International until they’re interviewed by trained security experts who watch for not-quite-kosher verbal responses or subtle behavioral signals. This low-tech alternative to the game of technology catch-up seems still to work after many years: Israeli flag carrier El Al hasn’t faced a successful hijacking in four decades. In 1986, El Al agents found 3.3 pounds of explosives a Jordanian man had hidden in the hand luggage of his pregnant young Irish fiancée, who thought she was flying from London to Israel to meet the family of her husband-to-be. The story—her traveling alone, him carefully packing her heavy bag—just didn’t seem quite right. The TSA is working on a similar approach, so if an unusually friendly TSA officer starts a casual conversation next time you’re waiting to check in, act natural; he or she just may be a “Behavior Detection Officer.”
2. Fill ’Er Up—50,000 Gallons, Please
Except for September 11 itself, nothing changed the business, and everyday experience, of air travel so much as the massive surges in the cost of jet fuel in the decade that followed. By the time the price per gallon hit $4 around the Fourth of July 2008—near five times its price on September 11—it was clear that the only airline survivors would be those hardheaded enough to focus ruthlessly on efficiency and the bottom line. The hard lesson was learned and relearned as successive waves of soaring prices hit again in early 2011 and early 2012.
Air travel uses oceans of fuel—jets alone burn enough every year to gas up every automobile on the face of the Earth. Commercial jetliners—more than 25,000 are estimated to be flying worldwide—are basically flying gas tanks. Instead of measuring miles per gallon, they’re clocking gallons per mile. The Hong Kong–bound 747 jumbo jet throttling up for a 12-hour journey at the end of San Francisco’s longest runway, 28-Right, is loaded literally to the wingtips. For nearly an hour, high-pressure fuel pumps have been shooting up to 1,000 gallons every minute—a rate that would fill the family SUV in a few seconds—into the plane’s center fuel tank below the fuselage, then into the vast hollow spaces of each wing.
As the massive engines spool up to maximum thrust, the 400 tons of aluminum loaded with 385 passengers rolls, grudgingly at first, down the two-mile tarmac that juts into the blue-gray waters of San Francisco Bay. The plane struggles aloft and slowly turns west over the Pacific, as nearly 1,000 gallons course through its engines in the first three to five minutes. (Just taxiing the huge plane on four engines burns roughly 20 gallons every minute.) Some 3,000 gallons are gone by the time it gets to its initial cruise altitude, a testament to the task of hurling the behemoth five miles high at four-fifths the speed of sound. By touchdown late the next day at Hong Kong International, the tanks have little fuel left. That single flight—one of thousands every day—consumes close to 50,000 gallons of jet fuel.
THE ROLLER-COASTER RIDE
To appreciate the transformative effect on airlines of the repeated fuel-price surges, consider that this indispensable liquid—”go juice” in military pilot slang—is the costliest ingredient in the business and that its price is beyond the industry’s control. Airlines can press unions for wage concessions, play Boeing against Airbus for aircraft discounts, stiff creditors in bankruptcy court and lobby for favors from regulators, but they can’t change the price at the pump. Every time that price rises a single penny per gallon, US airline fuel bills rise $175 million a year. On Wall Street, airline stocks and fuel prices move in almost mirror image.
The amazing thing is that hardly anybody in the airline industry paid serious attention to fuel prices for decades. Until the mid-2000s, fuel was a “given.” It cost what it cost; better to worry about labor, which used to be the number one airline cost. Fuel was a reliably stable, highly predictable entry in airline financial ledgers—about 52 cents a gallon in June 1986, 49 cents in 1990, 49 cents in 1994, and 44 cents in 1999. Adjusted for inflation, the price of fuel in 2003 was still lower than it was in the mid-1980s.
In economics and finance, there’s an iconic power in big round numbers. Dow 15,000. Unemployment at 10 percent. Jet fuel at $1 a gallon. When the latter boundary was crossed in 2004, the airlines’ trade association warned that the industry’s profitability was in jeopardy, but it was only the start. Prices accelerated past $1.66 a gallon in 2005, then near $2 in 2006, and worry grew to alarm. Wall Street’s top airline analysts warned that no major US airlines could remain profitable at these wild prices. They were right. Hit by the back-to-back crises of 9/11 and fuel prices, five of the seven largest US airlines had gone bankrupt by 2006.
Still, prices were destined to go much higher, and faster. On the first trading day of 2008, crude oil hit another milestone—$100 per barrel for the first time in history—and kept heading skyward. By late spring, an already-frantic industry was spooked even further by an ominous Wall Street prediction. Influential investment banking firm Goldman Sachs predicted a crude-oil “super-spike” up to $200 per barrel. Wild volatility added to the distress. The price of a barrel had risen just $2 a barrel over the entire decade of the 1990s, but it shot up nearly $17 a barrel on two successive days in June 2008 when an Israeli parliamentarian predicted military confrontation with Iran. That two-day price jump approached what had been the entire cost of a barrel on the world market at the beginning of 2002.
The ultimate peak in jet fuel’s price—near $4 per gallon—came the week after Independence Day 2008 as crude oil (a less-refined commodity) briefly topped $147 a barrel. The lifeblood of commercial aviation—now almost 40 percent of the total cost of running an airline—had more than doubled in just three years. It was as if gas for the family car had hit $8 a gallon.
The financial effect was dire. Nearly 40 percent of every ticket sold in 2008 went just to pay for fuel, up from just 15 percent in 2000. In just over a year in 2008, fuel costs sucked an extra $12 billion from US airlines—twice the amount of all the profits they had earned the year before. By the summer of 2008, airline-industry share prices (measured by the Amex Airline Index) had dropped to one-tenth their level on the day before the September 11 attacks; more than a dozen US passenger and cargo airlines filed for bankruptcy that year alone.
Then came the breathtaking collapse. Oil prices plummeted in late 2008 into 2009 even faster than they had soared. Less than four months after their peak, they had fallen by half. By the end of 2008, the price of crude oil on the New York Mercantile Exchange stood at less than a third of its summer peak. Had it all been just a bad dream? For a while, it seemed so. In 2009, while crude-oil prices hovered in a modest range of $50 to $70 a barrel, US airlines began to recoup the staggering losses of the year before. For the dozen large passenger airlines tracked by MIT’s Airline Data Project, combined operating losses of nearly $22 billion in 2008 improved to near breakeven in 2009. Not all that much to cheer about, but some relief.
The fuel-price specter returned in early 2011, and again in early and late 2012, as crude oil again crossed the $100-per-barrel barrier, heading upward largely in response to geopolitics and natural disasters. And even when the fuel roller coaster stabilized, it did so at levels that would have been extreme a decade earlier. The curse of fuel was here to stay, a threatening cloud looming over the new world of air travel.
SURVIVAL AND RESPONSE
The airline industry in 2008 was frantic to stem the tide of red ink, and the first and most obvious solution was just to use less of the now-exorbitant commodity. The effects on everyday travel were both trivial and profound.
Fly Less
The quickest way to burn less fuel was simply to fly less. As fuel prices approached their summer 2008 peak, the large carriers started to slash the number of seats they would fly after that summer season and into 2009—some of them cut drastically, by double-digit percentages. Especially hard hit were smaller cities, some served by relatively inefficient 50-seat regional jets made suddenly unprofitable by soaring fuel. More than 50 small markets lost air service at some point in 2008; some fell off the route maps entirely.
Slim down
Reducing fuel cost also meant cutting fuel-sucking airborne weight. In the mid-2000s, there was still plenty to cut. The old, heavy seatback telephones went first, then the “real” glassware. (US Airways tried lightweight plastic but had to bring back the glass Champagne flutes when First Class international passengers protested.) Removing the heavy galleys themselves was a no-brainer on domestic planes. It was the death knell for hot meals, but it shed tons of actual weight—the metal ovens and trash compactors, not to mention the older-style food and drink carts that weighed almost 50 pounds empty, up to 200 pounds loaded. Eliminating galleys also made room for another row or two of revenue-generating seats.
US Airways dumped its entire in-flight entertainment system on domestic flights and saved 500 pounds of videotape and DVD machines and associated wiring. And no more free (and weighty) magazines—not even those ubiquitous dog-eared copies of Golf Digest that always seemed the last to go. Want to read? There’s always the airline’s “inflight shopping mall” catalog tucked neatly in the seatback, printed on ultra-lightweight paper stock.
Some weight could be cut with nobody noticing. Leaving the airplane fuselage bare of paint could save some 300 pounds in the weight of a Boeing 737. Cleaning the jet engines overnight more frequently with high-pressure hoses reduced aerodynamic drag caused by tiny dirt specks. Lighter, skinnier passenger seats saved weight too. So did drink carts that weighed 12 pounds less (American bought 19,000 of them), lighter-weight cabin carpeting, even 25 percent lighter seat belts on Allegiant’s MD-80 planes. Desperate to cut any source of avoidable weight, Japan Airlines even reduced the size of the spoons and forks it carried, saving 2 grams (0.07 ounces) each. Even with a few thousand utensils on a transpacific Boeing 747 flight, that totals less than 20 pounds. And so-called “electronic flight bags”—laptops and sometimes iPads—could serve as lightweight digital substitutes for the 38 pounds of paper flight manuals and navigation charts that each pilot had to haul into the cockpit.
Lavatories got special attention. Gone were the heavy electric-razor outlets built into the walls. Who shaves in there anyway? For that matter, who needs all that water? Finding lavatory tanks still wet on landing, Northwest cut the amount of water loaded aboard. Japan’s ANA even asked passengers to visit the bathroom before boarding, portraying it as a “green” initiative that also cut weight. Even the very top of the premium passenger food chain sacrificed. When Emirates discovered that some of its ultra–First Class fliers were passing up the five-minute onboard showers the airline offered on its Airbus 380s, it reduced the ton of extra water carried aboard. Cutting all of this weight improved fuel burn, but only marginally. Huge jets are massive objects. Consider that the maximum takeoff weight of a Boeing 747-400 jumbo jet is some 400 tons—about eight times the weight of all its 400 passengers and their luggage.
Carry Less—Up to a Point
The heaviest thing carried aloft was the fuel itself, near seven pounds a gallon. When a 747 jumbo jet takes off, close to 40 percent of its entire weight is the fuel it carries. To burn less fuel, airlines needed to carry less fuel. Hauling enough extra fuel to keep the plane flying for just 15 minutes more at the end of a long flight (depending on altitude, speed, wind and lots of other factors)—can add more fuel-burning weight than carrying two dozen paying passengers, enough to turn some profitable flights into money-losers. So keeping fuel loads down seemed like an obvious imperative to airline budgeters, though not always to the conservative-minded pilots who bear the ultimate responsibility for the safety of the flight.
Under FAA rules and eons of tradition, the “pilot in command” has the final discretion to load as much fuel as he or she deems appropriate, though the airline flight planners and dispatchers make the initial call. And as an old pilots’ saying goes: “The only time you have too much fuel is when you’re on fire.” Pilots concerned about weather delays or unusual headwinds or potential course diversions can and do order more fuel than the FAA requires or dispatchers recommend. Rules require enough fuel to reach not only the planned destination but also a predetermined alternate airport, plus an extra safety “cushion” of 45 minutes’ flying time. That’s one reason commercial jets almost never run out of gas.
So airlines rarely squawked when their pilots loaded an extra few hundred gallons—until prices hit the roof. The issue came to a head at busy Newark International in late 2007 when air traffic controllers noticed an extraordinary jump in arriving flights declaring “minimum fuel” or fuel emergencies—up from 44 in 2005 to 151 in 2007. Called to investigate, DOT’s Inspector General found that one-sixth of all incidents involved a single Continental flight—from Barcelona to New York against prevailing Atlantic winds on a narrow-body Boeing 757. The Inspector General found no rule violations and no safety threat, but he did uncover a couple of questionable bulletins from the airline to its pilots. According to the IG’s briefing to New Jersey senator Frank Lautenberg at the time, the memos exhorted pilots to be aware of the “opportunity to improve reducing unwarranted crew-initiated addition of fuel” and warned that “adding fuel indiscriminately without critical thinking ultimately reduces profit sharing and possibly pension funding.” Would pilots worried about their pensions think twice before ordering those extra gallons?
Accusations flew. The week fuel prices hit their all-time peak, pilots at US Airways penned a full-page “open letter” to “our valued customers” in USA Today, the road warriors’ bible. In it, they accused the airline of a “program of intimidation to pressure your captain to reduce fuel loads,” which the airline heatedly denied. Just the week before, American had written to its flight dispatchers—ground-based FAA-certified staff responsible for managing each flight—that “carrying unnecessary fuel adversely affects American’s financial success” and that it would “review every dispatcher’s performance.” The controversy over excess fuel abated along with fuel prices in 2009, but it returned in 2011, coincidentally as prices resurged. Due mainly to unusually strong west-toeast headwinds in early winter 2011, dozens of the same transatlantic flights to Newark on the same types of Boeing 757s—pushing to the limits of their 3,900-nautical-mile range—found themselves again short on fuel. In December 2011 alone, they were forced to land 43 times (out of 1,100 flights ) to refuel in spots like Gander, Newfoundland, and Bangor, Maine.
Airlines tried almost anything to save a little fuel, even flying planes differently. Southwest expected to save $42 million in fuel costs in 2008 just by flying a few miles an hour slower. Arriving planes taxied to the gate on only a single engine, shut down the engines as soon as the chocks that hold the tires were placed around the nose gear, and immediately switched to the airport’s electrical “ground power” for cabin ventilation and lighting. (Southwest tries to hook up within 90 seconds of parking the plane.) Support grew for improved air traffic control technology that would let planes fly more direct routes without the fuel-wasting zigs and zags and stair steps now required to keep planes a safe distance apart.
No Panaceas
By 2011, the US airlines had become more fuel efficient, burning 11 percent less fuel than in 2000, while carrying almost 16 percent more “ton-miles” of passengers and cargo, according to industry figures. Less direct cures for the fuel-cost blues didn’t always pan out, though. A favorite, for a while, was a financial ploy known as “hedging,” common in buying and selling commodities, from gold to pork bellies. If you’re an airline decision-maker, you basically bet on what the price of fuel will be on some future date, paying to “lock in” today’s price for your future fuel needs. If world oil prices go up, you win, and pay less at the pump than your un-hedged competitors. But if prices drop below the price you locked in, you’re screwed. That’s exactly what happened during the roller-coaster ride of fuel prices from 2008 to 2010.
The undisputed world champ of fuel hedging was Southwest. Consistently guessing right that pump prices would rise in the decade before they peaked in mid-2008, the airline made about $4 billion on fuel hedging and so stayed profitable even as rivals foundered. Jealous traditional airlines eventually jumped in to place their own hedging bets and lock in fuel prices—in some cases, unfortunately, just as those prices were about to turn sharply south. Caught by the breathtaking price collapse that followed, hedging latecomers were hit hard. United, for example, racked up more than half a billion dollars in hedging-related accounting losses in the third quarter of 2008 alone. Even Southwest itself eventually lost its price bet, suffering its first quarterly loss in 17 years. Chastened, most major airlines in 2012 hedged a modest 20 to 40 percent of fuel costs.
A cheaper alternative to petroleum-based jet fuel has also eluded the industry. One problem is that jet engines are very picky. Any safe replacement for the real thing has to pass some extreme performance tests:
It can’t auto-ignite, even at broiling temperatures near 400 degrees Fahrenheit when sitting in the wing tanks on Persian Gulf tarmacs in midsummer, but must still be explosive enough when ignited to power super-high-thrust jet engines without fail.
It can’t freeze (and so risk blocking fuel lines) cruising high over the Arctic in the dead of a winter night when temperatures hit 65 below.
It must be capable of being produced in vast quantities, without turning forests or croplands into deserts, and usable in existing aircraft.
All a tall order, not likely to be filled easily or soon. Believers hope algae (think: pond scum) could supply one-third of all jet fuel by 2030, and all you need to grow it are pools of brackish water, not farmland. But so far at least, today’s experimental algae is expected to yield only about 1,000 gallons of fuel per acre. (Advocates envision twice to 10 times that production efficiency eventually.) In a Boeing engineer’s estimate reported by author James Fallows in China Airborne, supplying world airline needs would require algae fields the size of Belgium. As for other biomass fuels, Cathay Pacific predicts they could halve the price of today’s fuel—but only in 20 years or so. The ultimate hedge against soaring fuel prices? Buy your own refinery like Delta did in 2012. For $150 million, the airline bought an aging Pennsylvania facility from ConocoPhillips in hopes it will reduce the carrier’s annual fuel expense related to refining costs by $300 million, supplying 80 percent of the carrier’s domestic jet fuel needs.
The consternation over fuel in 2008 gave birth to the big-dollar surcharge but, in doing so, it also had a broader, profound effect on the airline business model. The “success” of fuel surcharges, and the willingness of air travelers to acquiesce to them, helped usher in the wondrous new world of ancillary fees, a river of new revenues limited only by the creative minds in the executive suites. There was a delicious irony: the fearsome explosion of world fuel prices had, in a sense, saved the industry from itself by forcing a tough new focus on profitability and the bottom line. The fuel hysteria also left in its wake a whole new frame of reference for the business of commercial aviation. Whatever vestige remained of the “customer service” ethos of the early Jet Age was supplanted by a hard-nosed business calculus: Don’t fly a plane you can’t fill. Cut flights and charge more for scarcity. (Don’t worry about competitors stealing your market share—they’re cutting too.) Peanuts for dinner will do in Economy. There was still plenty of marketing hype about customer service, maybe more than ever, and flying was as safe as ever. But “sit back and relax” had become “you get what you pay for.”
3. Riding the Flying Bus
Nobody quite knew what to make of them at first—or even what to call them—when they emerged as unloved stepchildren of airline deregulation 30 years ago. But low-cost carriers/discounters/no-frills/upstarts/ value airlines not only survived; to the chagrin of their traditional airline rivals, some ultimately flourished. By example, they dragged the whole airline business kicking and screaming into the new century and profoundly changed the way we fly. The CEO of Southwest, the quintessential “upstart” carrier, summed it up this way in a December 2011 memo to employees the week after American Airlines, the quintessential traditional “legacy” airline, filed for bankruptcy: “The sloth-like industry you remember competing against is now officially dead and buried. We fought them and we won.”
With lower costs, simpler fares, one-class service, fewer fees, and even fewer amenities (in their original “pure” form), the low-cost carriers seemed to lots of ordinary fliers somehow a little less soulless, manipulative, and money-hungry than the traditional carriers they challenged. Consumers complain about them to DOT less than a third as often as they complain about the large network airlines on average, and Southwest fliers complain least of all. Polls too confirm that US fliers hate them less than the large network airlines. In March 2012, J.D. Power and Associates’ annual survey of 800 US companies in 20 industries ranked only three airlines among the top 50 “Customer Service Champions”—Southwest, JetBlue, and Virgin America.
Before 9/11, who could have imagined, for instance, that Southwest—once a four-jet outfit conceived apocryphally on the back of a cocktail napkin in a San Antonio bar—would become America’s largest, richest domestic airline, with 40 profitable years in succession, a competitive threat so powerful it struck fear in the hearts of every mega-carrier and would discipline airfares across the land? Or that these rag-tag discounters would today carry one-third of all US fliers, compete on almost three-quarters of the country’s city-to-city routes, and make money year after year. Before they could become a game-changing force in an industry grown cozy under years of regulation, though, they had to survive the wrath of the established older rivals whose lunch they were trying to eat.
AN EXISTENTIAL THREAT
Fear is a powerful motivator, and traditional airlines feared what the low-cost newcomers seemed to do best: keep fares down. Exploiting lower costs and greater efficiencies, and cherry-picking only the more lucrative (and overpriced) bigger-city markets, they could offer fares their legacy rivals just could not profitably sustain. For network airline execs, the appearance of Southwest at the doorstep of your comfortable high-fare hub was a cause for dread. Competition was about to drop the fares you could charge, and so, too, your revenues.
Aviation economists even had a name for it: the “Southwest Effect.” When Southwest started flying from Baltimore in 1993, fares dropped 73 percent and traffic soared. When the airline invaded the high-priced Philadelphia market in 2004, average fares cratered there, too. And where Southwest stopped competing, fares could skyrocket. On the 259-mile route from Philadelphia to Pittsburgh, the cheapest advance-purchase round-trip fare jumped sixfold, from $118 to $698, plus taxes, when Southwest left the market at the start of 2012, according to USA Today. Similarly, when JetBlue left the Pittsburgh–New York route in early 2013, some competitors quickly offered alternatives—at more than five times the price. Put it this way: if a serious low-cost carrier chose to compete for “your” price-conscious customers, you really had only three options: slash your own fares to keep those customers, try to drive the new carrier away, or leave the market with your tail between your legs. All three happened.
From the perspective of the Old Guard pre-deregulation airlines—Delta, American, United, and US Airways, plus long-gone TWA, Pan Am, and Eastern—there were already “enough” airlines to fly travelers where they needed to go at government-approved fares. “Cutthroat” competition, after all, could benefit only consumers.
Traditional airlines took whatever steps were legal—and maybe then some—to keep the new guys from gaining a toehold, and they were successful. If a new carrier tried to compete by starting a couple of daily flights on your established route, you added four more flights of your own to “bracket” the new service, slashed your own fares—temporarily, of course—and loaded on extra “loyalty” or “mileage” awards that the start-ups couldn’t offer. You might even try to punish the newcomer by throwing a few cheaply priced flights of your own on some other route where the upstart was actually making money. And plenty of would-be airline entrepreneurs tried to play without adequate start-up funds or even a realistic business plan, naïve about the battle they could expect to face from longtime incumbent carriers. By the mid-1990s, close to 100 airlines spawned by deregulation had gone out of business.
The killer blow, in fact, had little to do with aggressive tactics by the traditional airlines. It was, in a word, ValuJet. Starting with a single used DC-9 in 1993, this hot new outfit was seen as a model of the breed. That same year, DOT had giddily declared the growth of Southwest, the most successful of the new genre, to be “the principal driving force behind dramatic fundamental changes” in the airline industry. In its first year of operation, ValuJet Airlines lowered fares in the high-priced Atlanta market, turned a profit, and added 15 planes, then ordered 50 more the next year. Regulators applauded the new competition. Success seemed inevitable until ValuJet’s Flight 592 corkscrewed into the Florida Everglades in May 1996. Though the NTSB ultimately determined the crash wasn’t entirely ValuJet’s fault (a contractor had improperly packed on board five boxes of flammable oxygen generators), it didn’t really matter whose fault it was. Would-be customers of any “no-frills” airline now asked the sale-killing question: “But are they safe?”
Left for near-dead after ValuJet, the surviving airlines eventually staged a resurgence. It was a testament to the power of their low-cost business model, but also to hard lessons learned about the rigors of airline competition, and support from competition-promoting regulators charged with allocating limited available rights to access the most popular, congested airports. And this time around, the new “little guys” weren’t always so little; they began with enough money to survive the by-then appreciated firepower of incumbent competitors. JetBlue didn’t even think about entering the fierce New York market in 2000 until after it had amassed a war chest of $130 million; Virgin America tapped its association with Virgin Atlantic Airways and its media-genius chairman, Richard Branson, to raise $177 million in start-up capital before its 2007 launch.
The newbies had gotten smarter, too. Rather than confront their deep-pocketed network rivals at their hub fortresses, the upstarts flew the same lucrative big-city routes, but often used secondary airports—Long Beach instead of LAX, Oakland instead of SFO, Islip instead of JFK or LaGuardia, Baltimore instead of Reagan National, and Midway instead of O’Hare. And they invested to maintain their critical cost advantage, acquiring new planes that would be cheaper to fly and to maintain. The “but are they safe?” question all but disappeared.
Low-cost carriers still pressure fares, but not quite like they used to. Traditional airlines too can now offer low, low, base fares and make up some of the revenue hit with expensive premium-class tickets and hefty ancillary fees. Even powerful discounter Southwest has lost some of its fare-disciplining mojo as it tries to cover its own rising costs, and so more often “goes along” with industrywide fare hikes. When fuel prices spiked in the middle of 2008, Southwest raised its fares an average of 8.4 percent, almost exactly the same as the legacy airlines, and fare levels at some of its airport strongholds have since climbed faster than the national average. The more lasting impact of the low-cost airlines, though, lies in the triumph of an innovative business model based on high productivity, dedication to simplicity, and carefully nurtured, distinctive “culture.”
MORE BANG
Low-cost carriers don’t pay less than the big airlines for their fuel or labor or airplanes, but they get more for each dollar they spend. More performance, more flights, and ultimately more passenger revenue from the same operating expense. Until 2008, it added up to a nearly 25 percent cost advantage. That gap has since narrowed by half in the United States, though, according to a 2011 study by consulting firm Oliver Wyman, as fuel (everybody pays about the same pump price) grows as a proportion of every airline’s operating costs.
Even with lower overall labor expenses, though, low-cost carriers (though not all of them) actually pay their employees better than traditional airlines. In 2011, Southwest’s pilots’ and copilots’ average total compensation of $237,000 (including benefits) outstripped the average of the other large US passenger airlines by almost one-third. On the other hand, those pilots also had many years’ experience and reportedly worked longer—almost an extra hour every day, though it varies from month to month. Non-pilot airline employees also make more at the typical low-cost carrier, though that gap is considerably narrower, according to MIT data. By paying more but also getting more work for that higher pay, low-cost airlines lower their true cost of operating—of flying each airplane seat a mile.
It’s much the same when it comes to making fuel more productive. Everybody pays the same price for the combustible liquid, but low-cost carriers generally cram more paying seats into the fuel-filled planes they fly, partly by eliminating First Class. Delta’s 737-700 carries 124 passengers, while the exact same plane flown by Southwest holds 137 paying seats. Spirit jams 174 “pre-reclined” Economy seats into its Airbus 320, while United carries 138 or 144 in its A320, depending on model.
There’s an even starker contrast when you compare where the two types of airlines “live.” United’s ultramodern operations center, soon to be joined by its global corporate headquarters, occupies a dozen floors in the tallest building in the United States, Chicago’s magnificent Willis Tower, formerly known as the Sears Tower. American, as revealed in its bankruptcy filings, housed its top international executive in Europe in a stately five-bedroom town house in one of London’s poshest neighborhoods—a lovely pied-à-terre worth upward of $20 million. Meanwhile, until 2012, JetBlue crammed almost everybody into several floors of a nondescript office building on Queens Boulevard, boasting a mid-rise view of the borough. It since moved to a century-old former auto assembly building in Long Island City, New York—still a subway ride from midtown Manhattan.
There are a lot of smaller things—call them “process inventions”—that boost the low-cost carrier productivity edge. The textbook example is the Southwest “turn”—the rapid-fire choreography that airlines have mastered to get an arriving jet—unloading, cleaning, servicing, refueling, reloading—quickly back in the air. The faster, the better; planes earn nothing sitting on the ground, as they say. It takes a lot of teamwork, motivation, and drilled-in coordination. Think NASCAR pit crew. Just watch the ballet when an incoming plane rounds the taxiway heading to its gate. Airline ground crew are on their feet, cradling refueling hoses, poised to crawl into cargo holds, plug in electric connections, and position the waiting baggage carts while fueling and waste trucks stand at the ready yards away.
The upshot is that Southwest can turn its Boeing 737 jets in roughly 30 minutes, sometimes as little as 25 minutes. (The airline’s average turn time has slowed a little since it began serving more congested airports like New York’s.) It learned how by necessity; as a fledgling carrier in the 1970s, it sold one of its four jets and had to “turn” the remaining three in as little as 10 minutes to meet its schedule. Traditional airlines turn the same domestic planes in 40 minutes on a good day, often closer to an hour depending on the airport, time of day, weather, and lots of other variables. So what’s ten minutes? Boeing says that saving ten minutes of on-the-ground time translates into 8 percent more time flying—and earning fares. Plus, it means Southwest can get more use out of the airport boarding gates it pays to lease from airports—at some busy airports, it can move as many as 10 flights per day through each gate it leases.
KEEPING IT SIMPLE, STUPID
At the heart of low-cost carriers’ success is a devotion to simplicity. Start with their aircraft fleets. United, for instance, flies more than a half dozen basic types of planes (excluding variants), while Southwest flies just one, the popular 737 (its merger with AirTran temporarily added a second, the smaller Boeing 717), and JetBlue uses two. Ideally, aircraft fleet uniformity means that every certified mechanic and technician can fix and clean and service most every plane. The hydraulics and fasteners and sophisticated avionics are the same, one plane to the next. So you need only one set of parts, one set of maintenance manuals, one warehouse system, one training program, one way of doing things—and all of your pilots are qualified and approved (“type-rated”) to fly all of your planes. Network airlines with long-haul and international service can’t do the same. They need very different aircraft to make it across the Pacific or over the Poles from the ones they use for the Atlanta–Dallas run. It’s one reason low-cost carriers in the United States don’t venture too far overseas (exceptions are Central America and the Caribbean)—they just don’t want the operational complication.
Simplicity also means flying to fewer places—the bigger the market, the better. Shuttling full planes back and forth between big cities works just fine; low-cost airlines serve very few of the country’s smaller airports. Of the 500 smallest (“non-hub” airports), only five had low-cost airline service in 2005, according to the GAO. Why worry about the intricacies of collecting Beijing-bound passengers in ones and twos from Lansing and Oshkosh and Greensboro, shoving them through big, expensive hubs, and sending them out again to Asia? Choreographing tight domestic hub connections, racing across tarmacs to make “hot” bag transfers between connecting flights, and scheduling rafts of gates, lounges, and crew facilities at city-sized hubs is costly, labor-intensive, and bound to tick off passengers who get caught in the inevitable screwups.
It’s not that low-cost carriers were uniquely creative business strategists. More that they could get away with kinds of “reinvention” their established rivals weren’t ready for and, more important, didn’t think their customers could tolerate. Take the elimination of onboard meals. Since United opened the first airline flight kitchens in 1936, there was always food on airplanes. Even if we mocked it, hated it, or ignored it, a meal was a fundamental part of the flying experience, a gesture of “taking care.” In the soft light of memory, some of it wasn’t all that bad, but more important was the anticipation, the diversion and, ask any kid, the thrilling otherworldliness of eating—who cared what it was?—above the clouds!
For the airlines, though, meals were an unwelcome expense—$5 to $6 per passenger in 2008, about 2 percent of operating expenses—and an operational and logistics headache. Even though most airlines left the cooking, chilling, prepping, storing, and hauling to a handful of “inflight catering” contractors, there’s was still the waste, hygiene issues, and tracking who gets Vegan, who gets Halal, and who gets Kosher. Hauling heavy galley ovens burns fuel. Heavily loaded food carts bash knees, block aisles, and strain employee backs. Galleys themselves displace paying seats; and crews have to heat, serve, and clean up. Onboard meals were just something else to worry about when trying to get the flight out on time.
The large carriers quietly ended meals on short flights immediately after 9/11, but dropping coach meals entirely on nearly all domestic flights? Wouldn’t passengers balk, maybe even switch to another carrier that still fed them? The proudly meal-less low-cost carriers provided “cover” for the whole industry to end coach meals once and for all. Southwest had never offered meal service—and bragged about it. Almost defiantly, it tossed bags of peanuts at its budget-minded passengers—a statement, even a subliminal compliment, to the frugality of its (still-hungry) customers. Hipper JetBlue offered signature “Terra Blue” potato chips in lieu of meals. If the millions who made Southwest the most profitable US carrier and JetBlue the country’s sixth largest airline in its first decade could live without free meals, so could fliers on American and Delta and United. Effectively killing the last free meals on domestic flights in 2010, Continental claimed the move reflected “today’s market and customer preference”—not to mention that it would save the airline some $35 million annually.
Traditional carriers couldn’t afford to emulate some kinds of low-cost airline simplification, though, like eliminating the elaborate stratification of service according to each flier’s “status” or fare. Distributing “perks” in proportion to what each passenger “contributes” to airline revenue, in the industry lexicon, remains a key revenue tool for the big airlines.
What better example than the network airlines’ ritualistic process of getting everybody onto the plane? As we’ve seen, each caste—starting with Platinum Gold Premier Chairman or whatever, working down to the Untouchables who are entirely without “status”—must be recognized in strict rank order by the harried gate agent. Compare Southwest’s “cattle call,” as it was known in its pure form until late 2007. It was simplicity itself: passengers lined up at the jetway door, got on, and grabbed any open seat.
HUMANIZING THE CULTURE
Most difficult to replicate, though, was an intangible ingredient in the low-cost airline success story—call it culture, spirit, or personality. It’s an ingredient that makes no-frills, tight-pitch, cram-aboard flying palatable—even preferable—for many ordinary passengers. When peanuts for dinner was still a joke instead of an expectation, the low-cost carriers’ less-robotic, up-front culture sent a message: “We won’t insult your intelligence by pretending coach air travel is a pleasant adventure, but we’re in this together, so let’s make it as decent as we can while we get you where you’re going.” At least it avoided the bland insincerity of “sit back and relax.” Less blowing smoke, fewer false expectations, no overpromising or broken bargains.
The ethos varied by carrier. Southwest perfected the easygoing “wedon’t-take-ourselves-too-seriously-and-you-shouldn’t-either” persona. JetBlue and Virgin America projected a cooler, urban vibe—where crew wore monochromatic uniforms, mood lighting tinted the cabin ceiling, and a menu of “Signature Cocktails” complemented the buy-onboard tapas. At the other end of the spectrum, there was the ultra-cheap, “just-get-me-there” spirit of Spirit and its successful counterparts in Europe, Ryanair and Easyjet, favored by holidaymakers and weekend soccer hooligans alike. JetBlue explicitly professed itself “dedicated to bringing humanity back to air travel.” Whatever, at least it seemed sincere.
Not that the Old Guard didn’t try to create an appealing new “culture,” but when they did, it felt more like fiftysomethings trying to act cool with their kids’ friends. Some tried to graft an “irreverent” vibe onto newly formed “airline-within-an-airline” subsidiaries that would offer stripped-down service in return for cheaper fares in big markets, in competition with the low-cost carriers. Who can forget short-lived experiments like “Ted” from 2003 to 2005—“part of UniTED” (get it?)—or Delta’s “Song,” with its Apple Martinis, singing flight attendants (for the safety instructions), and tightly packed Boeing 757s painted an unlovely lime green?
The low-cost-carrier cultures weren’t always all that organic or spontaneous, either. Southwest, for instance, established a “culture committee” in the 1990s to promote “the Southwest Way.” To find employees with the right attitude, its hiring became so selective—only 1 percent of résumé applicants got a job—that, by 2009, according to the New York Times’ Jad Mouawad, it was easier statistically to get into an Ivy League college than to get a job at Southwest slinging bags. Savvy management understood that an imbued culture gave workers a sense of ownership and responsibility—for the enterprise and for keeping customers happy. Culture Committee theme for 2010: “Count on Me to Own It!”
COMING TOGETHER
As the dust cleared a decade past September 11, traditional carriers had become more like the “backpacker airlines” they had once disdained. When US Airways merged with America West in 2005, it paid the ultimate compliment, choosing “LCC” (for “low-cost carrier”) as its new Wall Street ticker symbol. If you can’t beat ’em, join ’em. The once-yawning “cost gap” between the two kinds of airlines began to narrow. Low-cost-carrier labor and fuel costs rose, while traditional carriers used bankruptcy to escape all manner of expense; as their finances improved, they acquired more fuel-efficient planes that would further narrow the competitive cost advantage. As business travelers and frequent fliers came to see the Southwests and JetBlues as decent alternatives for domestic flying, the fare premiums passengers once paid to fly on “real” airlines began to disappear.
For the ordinary air traveler in back, it made ever less difference whether you were flying on Southwest or American, Virgin or United. Nobody provided free meals or much free anything, and please pass your trash. All flights were crowded, all offered much the same tight seat pitch and just-get-me-there ambience. Experts talked about the “hybridization” of the airline industry, but for the non-elites, the airline we flew mattered less and less. Now we’re pretty much all aboard the flying bus.