Take Two

There is a very good column from Joe Brancatelli on Portfolio.com today.  As a side note, I think every column by Joe is good.  He has a great feel for the business travel environment and what’s going on out there.

In the nutshell, he says that the airlines and hotel industry have taken advantage of (yea, punished) the business traveler for so long that, like a battered spouse who’s had enough, they’ve just walked away.  For me, here’s the money quote:

Consider this: Since Labor Day, the nation’s six network airlines and their commuter affiliates have grounded about 500 aircraft. That means a carrier the size of Northwest Airlines, the nation’s fifth largest, has essentially disappeared from the skies. Yet even with that estimated 10 percent cut in nationwide seat capacity, airlines haven’t been able to register increases in “load factors,” the percentage of available seats sold. In fact, passenger demand has fallen so precipitously that some carriers reported their load factors dropped in September or October.

That is not inconsequential.  I have noticed in my travels 1) much better prices and 2) much emptier planes.  To wit- I went to New York this summer (I go to New York a lot)  and paid north of $500 for the ticket and couldn’t Priceline.com a three star room for under $300.  Fast forward to this month- same ticket is under $300 (with lots of availability on the seating chart) and four star rooms to be had on Priceline.com for $180.  Full circle indeed.

Remember how Skybus famously crated here in Columbus. Their business model was all wrong.  It was focused around leisure only travelers who you can’t make any money off of.  The vast majority of my travel is business.  That means, if I have to go somewhere I’ll pay the high priced ticket and hotel room because I don’t have a choice.  I won’t like it but I’ll do it.  Now, with the economy in full retreat, it seems more and more business travelers are saying “no mas”.  Leisure travelers nearly always take cost into account.  It’s their number one consideration.  No business traveler plus no leisure travelers equals a lot of airline employees flying on buddy passes (six on a recent flight I was on).  You won’t pay the fuel bill with that.

One bright spot is all that is noted:

Travel will be easier for those of us who’ll still be on the road in the coming months. Airports will be less crowded, security checkpoints will be less frenetic and, miracle of miracles, more and more flights are running on time. Last year I was writing that nationwide on-time performance had slid to schedule-destroying levels. But last month 84 percent of the nation’s flights arrived on time, according to FlightStats.com. It’s the fifth consecutive month airlines have improved on-time performance.

This desperately needs to happen.  At one point over the summer, only 27 percent of flights into and out of the New York City airports (LaGuardia, Kennedy, and Newark) were on time.  That is a sad statistic.  Now, with a significant reduction of planes that number is improving.  And bully for that.

I’ll be interested to see if any lessons get learned or if, like so many things, this is just cyclical.

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