Flying Doesn't Have to be Such a Bummer

What you can do to make the best of today's unfriendly skies.

From Kiplinger's Personal Finance magazine, January 2009

Leo Prusak, the federal aviation administration official who supervises air-traffic-control facilities at all three New York-area airports, descended from the LaGuardia tower to the terminal one difficult day and saw a young woman who looked distressed and defeated. He couldn't resist walking over.

She had been living in the airport for two days, he discovered, and still had no immediate hope of getting out. Her first flight had been canceled, and there was no room for her on later flights. She was neither a frequent flier nor a first-class passenger.

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She had no pull in the terrible new world of aviation, where losses are measured in billions. Only high-end frequent fliers are valued in that world, and airlines must squeeze a fanny into almost every seat just to survive. The look on Prusak's face as he related this story later was more powerful than words. A man who directs massive hunks of metal was powerless to help one young woman get out of New York City.

You never want to be that stranded passenger, feeling helpless. But before we tell you how to make the best of the new realities of air travel, you need to know what brought the business to this sorry state.

The $5-Billion Bill
Few things in life are as unpleasant as an intrusive medical examination, a divorce or a trip by air. Of the three, only the airline trip seems to be getting worse. Infrequent fliers traveling on cheap tickets must pay for checked luggage. Meals and even free soft drinks seem to be fading into history.

The reason is that high fuel prices have collided with a global economic downturn. Even as the price of fuel moderates, it still accounts for 36% of airline operating costs worldwide, up from 13% in 2002. That and shrinking demand led the International Air Transport Association in Geneva to predict $5 billion in losses for U.S. airlines in 2008. "The situation remains bleak," says Giovanni Bisignani, IATA's director general.

So airlines are in the midst of their first planned, long-term shrinkage in aviation history. Going into 2009, there will be at least 7% fewer seats flying in U.S. airspace than at the start of 2008, and the shrinkage isn't over. It's the equivalent of a moderate-size airline being removed from the country's skies. Small cities are dis-appearing from the airlines' maps. Since the start of the fuel spike, more than 100 have lost commercial-airline service, including Youngstown, Ohio; Rutland, Vt.; Kingman, Ariz.; St. Augustine, Fla.; Santa Fe, N.M.; and Lancaster, Pa.

Why not just raise fares and make up the $5-billion loss? Airline people say that would be suicidal. Like the proverbial frog that jumps out of a pot of boiling water, passengers would flee if they felt themselves being cooked. Research has shown that a sudden rise in fares would chase away at least 20% of airline travelers -- those who could drive or simply change their vacation plans.

Gary Kelly, chairman of Southwest Airlines, the only large airline continuing to turn a relatively healthy profit, is a master at attracting the budget traveler. Says Kelly: "If we can move fares along at a gradual rate, that would be optimal."

Meanwhile, some European airlines are doing quite well. Lufthansa and Air France-KLM, for example, both announced that despite the economic downturn and high fuel prices, they expect to meet their profit forecasts. Other European airlines, even low-cost Ryanair, are cutting some flights and otherwise controlling costs, but they do not seem worried about their immediate future.

Survival Strategies
The big concern is how you, the passenger, can survive in an unfriendly air market. The main solution is surprisingly simple, yet it's an impossible dream for the vast majority of passengers: Be a high-mileage frequent flier on an expense account who must sometimes buy last-minute, more-expensive tickets.

Such fliers sit atop the airlines' food chain. When things go bad, airlines will take care of them first, although not nearly as well as in past years. For lesser beings, the aviation experience goes downhill, bottoming with occasional fliers who search for the lowest possible fare. Airlines gladly sacrifice them first these days.

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