It is cooler than ever to save a buck. With the invention of things like Amazon, Expedia, Google, and the explosion of Walmart stores all over the nation, it is becoming more and more socially acceptable to shop, eat, sleep and travel on the cheap. Let’s talk about a particularly effective niche for saving money on travel. The bargain airline ticket, rental car, hotel room websites. On the surface, this really seems like a win-win for travelers and providers alike. We get a cheap flight and the airlines are ensured sales to a broader market base. As with anything else involving the exchange of the ever-influential dollar, it’s far more complex than that. Many argue these bargain sites have driven the airline industry into the sheep herding business it feels like today. I tend to agree.
Before the airlines were deregulated in 1978 under Jimmy Carter, the U.S. government strictly controlled their routes, fares and schedules. This was a stabilizing force for the industry allowing them to anticipate costs and gains years in advance. The government was also obliged to ensure the airlines retained a reasonable rate of return. When the price of oil went up, they increased airfares to match it. This is what many refer to as the “golden era” of flight. The spotless flight crews, luxurious accommodations, and the feeling of being privileged were all part of the show. Not so anymore.
The end of regulation marked the beginning of the race toward the bottom. Prior to deregulation, getting into the airline business was nearly impossible. This allowed airlines such as American, Delta, Pan Am and United to dominate the market. After deregulation, airlines like Southwest, US Airways, America West and more recent airlines like JetBlue and Frontier were able to grab a significant share of the market simply by making fares cheaper. Now the airlines had to deal with the dreaded idea of competition.
Add to that the Internet and the low fare search engines and we have created the perfect storm for low class, low cost flying. The industry now is narrowing profit margins and charging to the bargain basement as low prices become the driving force behind ticket sales. And with lower fares the airlines are forced to operate as efficiently as possible, with nothing to spare (including passenger comfort).
The good news is the industry appears to have hit bottom and is headed in the other direction, but not like you might think they would. Instead of offering luxury meals as part of the ticket price, they are now beginning to offer surprisingly decent meals for purchase in flight. Want to sleep all the way to Sydney from Los Angeles? Buy a first class ticket and get yourself a lay flat seat. Don’t care for the in flight movie? Choose your own in the back of the seat in front of you for $5.
What’s to be learned in this? For one, if you just paid $39 for your ticket from Atlanta to Orlando, look at the person sitting next to you if you feel like complaining about the service you received. Your fellow travelers known as the flying public are responsible for this climate. If you want to be pampered you’re in luck. Throw down a few extra bucks and sit up front! First class is getting better and better with each passing year as multimedia entertainment systems and lay flat seats become the norm. And it's still a bargain compared to prices of the past. A 1996 Government Accountability Office report found that the average fare per passenger mile was about 9% lower in 1994 than in 1979. Between 1976 and 1990 the paid fare had declined approximately 30% in inflation-adjusted terms.
The golden age of flying is long behind us but we’re smack in the middle of the silver age! Just make sure you have that credit card handy when you take your seat and let’s hope we don’t go bronze.