In the July 1 podcast episode of Airlines Confidential former Spirit Airlines CEO Ben Baldanza attributed the different decisions around whether airlines are limiting capacity on planes, to allow middle seats to go empty, to the culture of those airlines. I do think there’s something to this, and where Baldanza didn’t go into detail I’ll sketch out why this makes some sense.
What’s the mental model of each airline?
American
- CEO Doug Parker argued for densification (cramming more seats onto planes) because it meant carrying more passengers, which is what he believes an airline is supposed to do
- President Robert Isom sees the airline’s primary competitors to model as Spirit and Frontier, here’s how he explained it before the pandemic:
[T]oday there is a real drive within the industry and with the traveling public to want to have really at the end of the day low cost seats. And we’ve got to be cognizant of what’s out there in the marketplace and what people want to pay.
The fastest growing airlines in the United States Spirit and Frontier. Most profitable airlines in the United States Spirit. We have to be cognizant of the marketplace and that real estate that’s how we make our money.
We don’t want to make decisions that ultimately put us at a disadvantage, we’d never do that.
- Chief Revenue Officer Vasu Raja comes out of Network Planning and sees the airline’s strength as its route network, not its product
United
- CEO Scott Kirby manages off the spreadsheet, if you cannot prove an investment improves the bottom line he’s historically very resistant to making it.
- And right now United has been willing to do anything for cash now, including illegally refusing refunds for cancelled flights
In some ways United might have had even more challenges than debt-laden American because of their reliance on international.
Delta
- Belief that they will earn a revenue premium providing more to customers
- Hard-nosed approach that includes the realization that planes are paid for either way, employees are paid for, so what’s the point in squeezing more people onto planes versus adding an incremental flight which just means paying for gas?
- Plus they reduced their connecting network more than American and Southwest, so it meant they weren’t filling planes anyway to some extent.
Southwest
- Has a customer focus brand, taking care of people (both customers and employees)
- Wants to grow its route network, with announced plans to be back to as much flying at the end of 2020 as they ended 2019
- If they’re flying more, they’ll naturally have lower load factors, so limiting loads in order for customers not to have to sit in middles isn’t as costly to them as United or Delta
- They start with a stronger balance sheet than American or United and can play a (slightly) longer game through the pandemic
It makes sense why American and United would sell every last seat on a plane customers are willing to buy, why Southwest doesn’t lose as much capping load factors and why doing so – they believe – will help them capture market share, and why Delta would take a more ‘premium’ approach that includes blocked middle seats.
And indeed right now I’d certainly prefer flying Southwest or Delta, or if I must fly American or United buying myself an extra seat.
@Gary – Why buy the extra seat for yourself?
So Gary can fool himself into thinking that the extra couple of feet will actually “save” him from COVID. Whatever lets you sleep at night.
@Christian you earn miles for both seats! Think of it as double miles promotion when you pay double the price.
@ptahcha – Love the answer but then why doesn’t Gary buy a second seat normally? Gary says that having a person sitting next to you on a flight won’t notably increase your chances of getting the virus. If that’s the case, Gary shouldn’t need to buy a second seat if he flies AA or UA but he says above that he would.
Market Positioning was not interrupted by the Chinese Virus; instead, it only exacerbated the difference between carriers.
At this point, it would not be easy for AA to evolve from such a self -destructive position it has eagerly assumed. If it is a choice between a n-s AA flight vs a 1-stop DL, which will be picked? Now lay that across transcontinental and trans-Atlantic schedules.
If people want a lousy product and inferior experience, they’ll find a ride at Disneyland to emulate that hell.
If people can sleep at night because the airplane is comfortable and there is no one in the middle seat their immune systems will be functioning better and they will be in better shape to fight the Wuhan virus and any other virus. I just flew rt from DEN to PDX on Southwest.
Very pleasant and stress free flights.
Delta does use the middle seat. They cancelled my nonstop Bos to LAX, and shifted me to Bos to MN to LAX, and then lax to Atlanta to Bos, in a middle seat out and back. I cancelled and went jet blue non stop….for less.
American doesn’t have a product. People buy American only when there’s literally no other choice or cannot afford more, which means they’ll always lose the most amount of money / earn the least because they have to keep lowering their prices to below costs to fill their planes.
Text-book bad strategy.
I’ve flown all the major airlines. Spirit is the worst Delta is the best. I fly Delta because everything an airline can do Delta does better. So now they have less seats but i will still fly delta pay a premium and look forward to not sitting next to anyone.
@Jk says that Delta booked him into a middle seat recently. How can that happen if Delta is publicly claiming that middle seats are blocked? This deserves an investigation.
In your Chrissy Tigs article, you argued that historically there hasn’t been much spread on planes. If you really believe that, then why the extra seat?
– A guy who caught it in Alaska first class from the row behind me, possibly because everyone uses the same bathroom without a mask.
Mark, don’t be racist. It’s not called the Chinese virus by any health authority. Just because Americans have a long history of labeling viruses after other countries doesn’t make it right.
And if you’re going to insist that it be named after origin, why not the “Bat Virus?” It sounds so much cooler.
@Andrew – the convention of naming a virus for where it was discovered is neither an American one nor a new one, in this case that may not have happened because of Chinese influence over WHO, but I agree the only reason to give it a new name at this point is as an attack on China.
Good job Southwest! Being customer oriented is the best approach in any situation. My husband has flown 2 round trips with them, in California, in the last 4 months, safe & sound. This approach will keep Southwest as my go-to airline!
All airlines are now insolvent…. Why Southwest gets away with driving an All EGGS IN ONE BASKET AIRPLANE and fails with Boeing on operating a one TYPE RATING a/c for cost while unsafe is unthinkable. Who will Headline the truth on the Max. Boeing lead down primrose path by Southwest!!!
I just flew Allegiant from Memphis to LAS Vegas and the flight was booked at 100% capacity. It was scary and uncomfortable. I will relook at future bookings.