How flying got so bad (or did it?)
4Digest
This Planet Money episode delves into the fascinating history of air travel, tracing its transformation from a luxurious experience reserved for the wealthy to the more affordable, albeit often less comfortable, reality we know today. The episode begins by examining the regulated era of air travel, where the government controlled the number of airlines, their routes, and ticket prices. This led to a period of intense competition on amenities, resulting in lavish features like piano bars, meat carving stations, and spacious seating. However, the episode highlights the high cost of flying during this time, making it inaccessible to most. The narrative then shifts to the era of deregulation, spearheaded by Don Burr, an executive who believed in the potential of a free market for air travel. Deregulation led to the emergence of budget airlines like People Express, which focused on low fares and stripped-down amenities. This sparked a price war with established airlines like American Airlines, led by Bob Crandall, who implemented cost-cutting measures and innovations like frequent flyer programs and variable pricing. The episode explores the impact of these changes on the industry, including the rise of hub-and-spoke systems and the consolidation of airlines. While deregulation ultimately led to lower ticket prices and increased accessibility for the average person, it also resulted in a decline in amenities and the rise of logistical challenges. The episode concludes by reflecting on the trade-offs associated with deregulation, acknowledging that while flying is more affordable than ever, it has also become less luxurious and more stressful. The episode leaves listeners with a nuanced understanding of the complex economic forces that have shaped the modern air travel experience.
Outlines
Introduction
This Chapter introduces the Planet Money podcast and the topic of the episode: the evolution of air travel from a luxurious experience to a more affordable, but often less comfortable, reality.
The Golden Age of Air Travel
This Chapter explores the regulated era of air travel, where the government controlled the number of airlines, their routes, and ticket prices. This led to a period of intense competition on amenities, resulting in lavish features like piano bars, meat carving stations, and spacious seating. However, the episode highlights the high cost of flying during this time, making it inaccessible to most.
Deregulation and the Rise of Budget Airlines
This Chapter focuses on the deregulation of the airline industry, spearheaded by Don Burr, an executive who believed in the potential of a free market for air travel. Deregulation led to the emergence of budget airlines like People Express, which focused on low fares and stripped-down amenities. This sparked a price war with established airlines like American Airlines, led by Bob Crandall, who implemented cost-cutting measures and innovations like frequent flyer programs and variable pricing.
The Modern Flight Experience
This Chapter examines the modern air travel experience, highlighting the challenges and trade-offs that have resulted from deregulation. The episode discusses the consolidation of airlines, the rise of hub-and-spoke systems, and the impact of budget airlines on pricing and amenities. While deregulation has made flying more affordable, it has also led to a decline in service and increased logistical challenges.
Keywords
Deregulation
The process of removing or reducing government regulations, particularly in the airline industry, which led to increased competition and lower fares but also a decline in amenities and service.
Budget Airlines
Airlines that focus on low fares and minimal amenities, such as People Express, Spirit, and JetBlue, which have significantly impacted the airline industry by forcing established airlines to lower prices and compete on cost.
Bob Crandall
A former executive at American Airlines who was a vocal opponent of deregulation but later embraced cost-cutting measures and innovations to compete with budget airlines. He is known for his controversial statements and his role in shaping the modern airline industry.
Don Burr
A former airline executive who championed deregulation and founded People Express, one of the first budget airlines. He is credited with revolutionizing the airline industry by introducing low fares and a focus on efficiency.
Hub-and-Spoke System
A system used by airlines where passengers are flown from various locations to a central hub airport, where they are then transferred to other flights to their final destinations. This system allows airlines to operate more efficiently but can result in longer travel times and more transfers for passengers.
Frequent Flyer Programs
Loyalty programs offered by airlines that reward frequent travelers with points or miles that can be redeemed for free flights, upgrades, or other benefits. These programs have become a significant part of the airline industry, encouraging customer loyalty and influencing travel decisions.
Piano Bar
A bar on an airplane that featured a piano, a luxurious amenity offered during the regulated era of air travel. This feature highlights the level of service and amenities that were once common in air travel.
Meat Carving Station
A station on an airplane where flight attendants would carve meat for passengers, another luxurious amenity offered during the regulated era of air travel. This feature highlights the level of service and amenities that were once common in air travel.
American Airlines
One of the largest airlines in the United States, known for its history of innovation and its role in shaping the airline industry. The episode highlights the company's response to deregulation and its competition with budget airlines.
People Express
A budget airline founded by Don Burr that revolutionized the airline industry by offering low fares and stripped-down amenities. The episode explores the airline's rise and fall, its impact on the industry, and its legacy as a pioneer of budget air travel.
Q&A
What were some of the luxurious amenities offered during the regulated era of air travel?
During the regulated era, airlines competed on amenities, offering features like piano bars, meat carving stations, spacious seating, and even custom playing cards and cigarettes delivered in fancy cases.
How did deregulation impact the airline industry?
Deregulation led to increased competition, lower fares, and the emergence of budget airlines. It also resulted in the consolidation of airlines, the rise of hub-and-spoke systems, and the introduction of frequent flyer programs and variable pricing.
What were some of the cost-cutting measures implemented by American Airlines in response to the rise of budget airlines?
American Airlines implemented various cost-cutting measures, including eliminating olives from onboard salads, hiring mathematicians to optimize staffing, and adopting the hub-and-spoke system.
What are some of the trade-offs associated with deregulation in the airline industry?
While deregulation has made flying more affordable, it has also led to a decline in amenities, increased logistical challenges, and a more stressful travel experience.
What is the role of budget airlines in the modern airline industry?
Budget airlines like Spirit and JetBlue have kept price pressure on established airlines, helping to keep fares low. However, they have also contributed to the decline in amenities and the rise of logistical challenges.
Is flying better or worse today than it was in the past?
The episode presents a nuanced perspective, acknowledging that while flying is more affordable and accessible than ever, it has also become less luxurious and more stressful. The trade-offs associated with deregulation have shaped the modern air travel experience.
What is the moral of the story about the evolution of air travel?
The episode suggests that deregulation has had both positive and negative consequences, highlighting the trade-offs associated with economic forces and the impact on consumer experience.
What is the future of air travel?
The episode concludes by suggesting that the future of air travel will likely continue to be shaped by the balance between affordability and amenities, with budget airlines playing a significant role in keeping fares low.
What is the significance of the story about Don Burr and People Express?
The story of Don Burr and People Express highlights the impact of deregulation on the airline industry and the rise of budget airlines. It demonstrates how a single individual's vision can revolutionize an entire industry.
What is the significance of the story about Bob Crandall and American Airlines?
The story of Bob Crandall and American Airlines illustrates the response of established airlines to the emergence of budget airlines. It highlights the strategies used to compete in a deregulated market and the impact of cost-cutting measures and innovations on the airline industry.
Show Notes
How did we get here? Most of the inconveniences we think about when we fly can be traced back to the period of time just after the federal government deregulated the airlines.
When commercial air travel took off in the 1940s, the government regulated how many national airlines were allowed to exist, where they were allowed to fly, and how much they could charge for tickets. But the Airline Deregulation Act of 1978 swept all these restrictions aside – and stopped providing subsidies for the air carriers. Airlines had to compete on ticket prices. That competition led to a more bare-bones flying experience, but it also made air travel a lot more affordable.
In this episode, we trace the evolution of air travel over the past century to discover whether flying really is worse today — or if it's actually better than ever. We'll board a plane from the "golden age" of air travel, hear the history of one of the original budget airlines and meet feuding airline CEOs. Along the way, we'll see how economic forces have shaped the airline industry into what it is today, and what role we, as consumers, have played.
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