Friday, December 10, 2004

Airline Economics I - Going Broke Flying Full

Have you been on an airliner lately? I don't care which airline, but did you notice that it was pretty full? Even on the airlines that are in bankruptcy the airplanes seem to be full. With full airplanes, how can the industry be swimming in an ocean of red ink?

Now, have you noticed what airlines are charging to take you thousands of miles in relative safety and efficiency? (Yes, Virginia, flying is safer than driving...A lot safer). The airplanes are mostly new employing state of the art technology and the airports and terminals for the most part are new or being remodeled and improved.

The answer on a per mile basis is almost nothing. Flying is dirt cheap. For short haul flying, it can easily cost more to park for a few days than a ticket to a nearby city.


Competition and the vagaries of the airline business. You see, airlines have virtually the most perishable product possible. If Safeway doesn't sell a bunch of bananas today, they can sell them tomorrow and maybe the day after until they show brown spots. An airline seat is completely lost revenue as soon as the airplane pushes back from the gate. The marginal cost of producing that seat is near zero as the airplane, fuel, crew, and ground facilities are all already paid for whether that seat is filled or not. Therefore, any revenue at all which can be made from filling that seat is gravy on top of fixed costs. That means that if the airline can sell the seat for $20.00 just before pushback, that's $20.00 of revenue with almost no additional cost.

That, then is the reason that airlines have incentives to undercut each other to fill otherwise empty seats. Unfortunately, they tend to collectively bring too many seats to market and can't make any money while fighting each other in a race to the bottom. Hence low prices, full airplanes, and broke airlines

Why do they do this? That will be the subject of a future post.


I always get a kick out of passengers who when getting off the airplane will look at me earnestly and say something like: Thank you for getting us here safely. As if they weren't on the plane, I would have flown a little less safely. Newsflash: I fly safely to keep my own pink backside from hitting the terra firma, not necessarily that of someone paying $29 for a weekend jaunt to see their boyfriend who's probably going to dump them after this next weekend.

This last trip we really had some rough rides over the Sierra Nevada prompting quite a few such comments. Usually, if we hit some rough air, we just change altitude or slow down or both and it soon passes. On our last leg, we hit continuous moderate turbulence that just wasn't going away. Turbulence is classified as light, moderate, or severe. Actually, there are only two useful categories which are light and moderate. When it turns severe, we won't fly.

When the average passenger experiences moderate, they usually think they've experienced severe because the ride is fairly rough. Walking is impossible. Drinks jump out of cups and land in laps. And this evening was a little unusual in that there was no escape from the bumps. We were travelling over the mountains while a weather front was blowing into Northern California. Airplanes at all altitudes were complaining about some bad rides. Luckily for us, we had only 14 passengers on board so the liklihood of someone yakking and causing a sympathy yak was minimal.

Finally the rides smoothed out as we descended below 10000ft into Vegas.

Friday, November 19, 2004

Another Day Off

Here I am again wasting time on the computer on a day off. I should be going through my stack of bills and papers, or cleaning the boat, or fixing the fence but it is far easier to just click away from Quicken and check out the latest gossip online. The wife and I did get over to the gym this morning after dropping the kids off at school and helping to set up for their Thanksgiving feast. Once we got home I even ordered some flowers for my mother for turkeyday and a replacement canopy for a shade structure in the back yard. That should be more than enough productivity for anyone on a Friday. Tomorrow my son has a swim meet and then he wants me to take him dirt biking. The weather should cooperate. On Sunday morning I'm back out the door for a three-day trip with overnights in Connecticut and Indy. The Indy hotel is a converted train station with live railroad tracks still going through the building. There is a bar next door which plays live blues most nights. Sleeping of course may not always be possible, but the blues are great.

Tuesday, November 16, 2004

On the Road Again

Ontario California last night. It's a nice Hilton but I don't understand why a business hotel has neither the Wall Street Journal nor a high speed internet connecion. I'm connecting through my phone to bring you these missives from the front, gentle reader. The airplane has been empty. We flew down here with about 20 people on board. Let me tell you that with an empty cabin and just 10000lbs of fuel, that wingleted, 24k engine guppy climbed out like a homesick angel. We passed back by the field climbing past 10000ft and would've been higher except for a hold down.

Short overnight last night. Just 14 hours followed by five legs today. Reno tonight for another 14 hours and then five more legs to finish the trip tomorrow night. Loads should stay light until the holiday season begins. Then of course all chaos will break out. That is all for now.

Saturday, November 13, 2004

My job

There's absolutely no doubt about it. I've got the best job in the universe. My employer pays me obscene amounts of money to fly a 40 million dollar state of the art aircraft from city to city while being served peanuts and diet cokes by hot young flight attendants. OK strike that. Since 9/11 we don't really see them that much. They're not supposed to come up front unless absolutely necessary but nonetheless they're still young and hot...OK strike that too. OK, its still alot of money to fly a new airplane around the country. I'm actually lucky to be flying for one of the few solvent and growing airlines. And it's actually not luck that makes my airline profitable but you wouldn't know that talking to some people. But airline economics is a topic for another day.

Yesterday we flew into PDX with about 1/16 mile visibility. Our procedures are to hand fly the aircraft (that means without the autopilot) down to 50 feet above the runway on instruments only and to then make the decision to land or go around. Sounds exciting and it is but it is even more exciting with only a few hours of sleep. There is nothing that can't be done with a venti drip Starbucks under your belt. Worth every bit of $1.93 (with the employee discount).

Friday, November 05, 2004

You Can't Bring Work Home

One of the nicest things about this job is the inability to bring your work home. With the exception of the occasional home study exam, work remains at work. In fact, while I'm at work, it becomes my home. I'll spend two to three nights a week in a hotel in a different city. Some places are pretty nice and some not as nice. Pet peeves are cold showers, early morning vacuum cleaners in the hall or everyone's favorite: early morning construction. And don't even get me started on a broken TV remote! But by and large, the overnight hotels range from comfortable to occasionally luxurious as the hotel business waxes and wanes. The airline buys bulk rooms on a contract basis. When the hotel business is bad, the airline contract may make the hotel's payroll and we get better rooms; when business is booming, retail rates bring in more revenue and our hotels seem to migrate out of the downtown areas. But I digress.

Today I am home and wasting time which should be spent at the gym in front of the computer. Sandy, my lovely and talented wife (who is also an airline pilot) took our four children to school a little early for a bake sale and will meet me at the gym later but for now I am still in bathrobe with coffee listening to election fallout on NPR. I'll eventually get out the door to the gym and then perhaps take care of a few errands in the precious kid-free time between 8 and 3. My 7yr old daughter, Emily has demanded that I bring home all the magnetic key card from my overnight hotel stays. She wants to collect 100 of them to take to school for the 100th day of school. Her collection is coming right along. That's actually kind of a depressing thought.

This is Your Captain Speaking

Welcome to my blog. My name is Rob and I am a captain flying a Boeing 737 for a major US airline. Flying in the back of an airliner as a passenger before getting into commercial aviation I often wondered what exactly is going on up front behind that cockpit door. What type of people get to fly these airplanes and what is the life like? I also wondered how one becomes an airline pilot. Now twenty some years later I know the answers to a few of these questions and would like to share them with you, gentle reader. So fasten those seatbelts and return your seats to their full upright position. Flight attendants, please prepare the cabin for takeoff.