Strapped airline system at breaking point

By Charles Leocha

Travel columnist

updated 3:05 p.m. ET June 21, 2007

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The airline system in America is pushing the breaking point. According to the Federal Aviation Administration, airline delays are already at an all-time high. And with the crowded summer season upon us, the problems caused by full planes, limited crews, ground delays and lost luggage are only going to get worse. The root cause is the airlines' drive to improve profits. But what's good for investors in the short run — high load factors and a lean work force — is bad for passengers and eventually will bite the investors in their financial rear ends.

Until then, travelers will need to practice defensive flying.

High load factors
The biggest problem for summer air travel is high load factors. When everything works perfectly, full planes are an executive's delight, but if a thunderstorm or an air traffic delay or a late crew gets thrown into the mix, disaster can strike. If a flight is canceled or a connection is missed, the airlines cannot easily accommodate the displaced passengers. In the old days, the solution was to put passengers on the airline's next flight, but now that flight is often packed, as is the next flight and the next. Nor are there empty seats on other carriers. Miss your flight or a connecting flight, and you'll spend a lot of time in the airport waiting for a seat to open up on any airline.

American, Continental, Delta, United, US Airways and Northwest airlines are all flying with load factors in the 80 to 85 percent range. That means that the average 757, which holds 188 passengers, is flying with only 28 empty seats. An MD-80 with capacity for 136 passengers would on average have 20 empty seats. A 737, which seats 124, would have 19 empty seats.

These are average load factors over the past few winter months. During the summer, these loads are expected to creep even higher. It is easy to see that if one of these flights is canceled, the displaced passengers will have to be accommodated on an average of six other airplanes. And then there's the domino effect. Once those six flights are filled, the next canceled flight will have passengers looking far and wide for a plane to get them where they need to go. From small airports, you might wait days, not hours.

Understaffed air crews
The airlines have also, over the past few years, reduced their payrolls. From a business management point of view, the work force reduction seems prudent, but airlines need to factor in the inevitable weather, ground and air-traffic delays. When one crew can't make it to the flight, a reserve crew must take its place. When there are no more reserves because personnel have been reduced dramatically, flights get delayed and canceled.

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If the airlines were a happy family of employees, the workers might bend some nonessential employee rules to help out the passengers. But after recovering from financial disaster and bankruptcies, airlines are no longer particularly harmonious when it comes to relations between executives and employees. In fact, there is a great deal of dissatisfaction about the way some executives are paid at a time when frontline workers' paychecks and pensions have been cut.

At American Airlines, for example, the executives decided to pay themselves more than $100 million in bonuses (almost the entire annual profit) before negotiating with the carrier's pilots, flight attendants and other workers for minimal raises. Similarly, at United Airlines, the top bosses rewarded themselves millions of dollars as they came out of bankruptcy while stripping their workers of their pensions and forcing them to take reduced salaries over the past two years.

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Northwest Airlines, which isn't yet out of bankruptcy, has already received a vote of no confidence from its rank and file after the employees learned that the CEO was planning to snatch a bonus of millions after imposing wage cuts through the courts. And US Airways, which recently merged with America West, has managed to get the pilots grumbling at each other as they begin to merge two different seniority systems from the two airline-pilot unions. This pattern will no doubt be followed by similar disruptions when flight attendants, mechanics and ground workers are unified.

Understaffing and unhappy workers are not a good combination when facing already stressful working conditions. The University of Michigan's American Customer Satisfaction Index released in May 2007 rates airlines below the Internal Revenue Service when it comes to satisfaction. The report also indicates that airlines that have poor employee relations are ranked up to 26 percent lower in customer satisfaction than those who have good esprit de corps.

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