"Airlines stretched so thin that one piece out of place throws themoff"

Wednesday, March 14, 2007

Airlines stretched so thin that one piece out of place throws them off
By Dan Reed
USA TODAY


Charlie Miller could be a poster child for nightmarish air travel during 
the winter now drawing to a close.

A hospital consultant from Barneveld, N.Y., Miller got caught in the 
Dec. 20 blizzard that closed Denver International Airport for more than 
two days. Told by his carrier, Continental Airlines, that it would be 
Christmas night before it could get him home, Miller eventually set out 
on his own.

He managed to get home late on Christmas Eve. But to do it, he had to 
sleep two nights at the airport, check in at two high-priced hotels, pay 
$150 for an 8-mile cab ride in Denver, buy a first-class ticket on 
United, fly to Los Angeles, then connect through Philadelphia. His total 
extra cost: $3,000.

"I know weather is not covered" by the airline's policy for compensating 
displaced travelers because it is beyond their control. "But everyone 
was so rude and uncooperative," Miller said.

The travel collapse precipitated by recession and terrorism in 2001 has 
prompted draconian reductions by an industry that lost $35 billion over 
the five years ended in 2005. Domestic airlines are operating smaller 
fleets and filling more seats on the average flight. They've shed 
154,000 workers, become heavily reliant on do-it-yourself ticketing and 
shifted some of their telephone reservations work offshore and to 
part-timers working from their homes.

The retrenchment has brought most airlines in the USA back to thin 
profitability. But it also has created an industry that is running full 
tilt all the time and more vulnerable to breakdowns when faced with 
adversity.

Lesser events than that pre-Christmas blizzard in Denver have disrupted 
air travel this winter. Hundreds of thousands of air travelers had their 
lives knocked off course this winter by a dust storm that closed 
Dallas/Fort Worth airport, an ice storm that slowed operations at New 
York John F. Kennedy on Valentine's Day and a flawed computer 
switch-over by US Airways last week.

It's not just the cutbacks that limit airlines' ability to bounce back 
from adversity. Outmoded systems for controlling aircraft on the ground 
and in the air, along with airport growth that lags behind the increase 
in passenger traffic, leave the aviation industry today with almost no 
margin for error.

R. John Hansman, an information technology and aviation expert at 
Massachusetts Institute of Technology, says the nation's air travel 
system is approaching capacity.

It's operating so close to the edge, Hansman says, that when any little 
thing goes wrong in one location, things are prone to go wrong across a 
whole region or even the nation.

Traveler Jan Harrison, a corporate trainer from Poulsbo, Wash., who 
twice last month was thrown off schedule by long delays at Salt Lake 
City and Chicago, puts it another way: "The entire system is so 
stretched, so understaffed, without room to flex. If it's sunny, and not 
too windy, and everybody does his or her job exactly right at exactly 
the right time, and the passengers can board themselves quickly and 
without any issues … well, maybe we have a chance to take off on time."

*Fewer flights *

Almost 684 million people boarded commercial planes in the USA through 
the first 11 months of last year, according to the most recent numbers 
from the U.S. Bureau of Transportation Statistics. That's more than the 
record 670 million boardings in all of 2005. But there were 3% fewer 
flights operated last year than in 2005.

Thus, planes last year were more full than in 2005. U.S. airlines filled 
a record 79.4% of their seats in the first 11 months of 2006. That 
average masks the fact that on the most popular routes, flights 
typically ran close to 100% full.

Though U.S. carriers are filling eight out of 10 seats on average, they 
remain barely profitable. In 2006, the industry profit margin was less 
than 2%, according to preliminary industry estimates.

All those packed planes create a huge problem when weather or other 
events cause airlines to go off schedule. There simply aren't enough 
readily available seats to accommodate all the displaced travelers. 
Miller, the New York consultant, was told he'd have a five-day wait in 
the pre-Christmas travel rush. Waits of 24 to 48 hours to get a rebooked 
seat are more common.

Part of the current problem with air travel may be one of perception. 
Delays caused by weather or other unexpected events are inherent in any 
form of travel. And whenever they begin to pile up in air travel, as 
they have this winter, the negative headlines seem to stack up almost as 
deep as the stranded passengers. Frequently, they become part of the 
national conversation.

For example, the Valentine's Day ice storm in New York triggered a 
six-day near-meltdown of JetBlue's operations. CEO David Neeleman spent 
three days apologizing publicly. He went on CBS' /Late Show with David 
Letterman/ after Letterman had been particularly biting in his criticism.

*Rare events *

Statistically speaking, such events are rare. Last year, only about 10 
out of every 10,000 flights were delayed more than two hours, according 
to the U.S. Bureau of Transportation Statistics. But that, says airline 
consultant Ira Gershkoff, a former airline operations executive who now 
leads JIT Airline Resources, does not entitle airlines to a free pass.

Says Gershkoff: "When there's a big tornado and 20 people get hurt or 
killed, we don't minimize it by saying it's only 0.02% of the local 
population, or whatever. So this is a legitimate issue."

For the most part, travelers seem to have taken well to today's 
do-it-yourself ticketing. American, for example, says 80% of its 
passengers avoid airport counters by using kiosks, the Internet or 
for-pay curbside services to check in.

But when things go wrong, the few agents working can be overwhelmed. 
That's because, in percentage terms, the biggest personnel cutbacks 
during the first half of the decade were among gate agents and telephone 
reservationists, according to industry data.

Mike Maloney, a beverage industry sales executive from Overland Park, 
Kan., says communication from the airline in such situations has become 
a huge problem.

When a scheduled six-hour trip home recently from Fort Lauderdale took 
12 hours because of mechanical problems with two different planes and a 
de-icing delay at American's Dallas/Fort Worth hub, he and other 
travelers were kept in the dark. "Getting simple and accurate 
information to the customer doesn't seem to be their priority," he says. 
"No wonder people are pushing (Congress) for a passenger's bill of rights."

Jerry Quintiliani, a chemical salesman from Peoria, Ill., says he 
increasingly is "flabbergasted" by the way airlines and their front-line 
agents deal with delays.

A recent flight home from Chicago's O'Hare was canceled because of bad 
weather. The lone agent at the gate rebuffed requests for help in 
finding other flights, hotel rooms or rental cars on a night when all 
were in short supply.

Quintiliani eventually got home by teaming with two similarly desperate 
strangers. They rented a car and drove. "We got no help from the airline 
at all," he adds. "We know you can't control the weather, but at least 
give us an idea of what we can expect. And be nice about it."

David Castelveter, spokesman for the Air Transport Association, the 
airlines' main trade group, agrees that the margin for error has 
narrowed. He says problems with quickly rebooking delayed fliers are the 
result of carriers filling such a high percentage of seats. In filling 
planes fuller, airlines are "providing our customers what they say they 
want most: cheap fares."

He says the delays are largely the result of governments failing to 
invest enough, and move fast enough, in updating the USA's aviation 
infrastructure. He says delays will get worse "until we modernize our 
air traffic control system." The industry is urging Congress to include 
more money for system modernization in pending legislation reauthorizing 
the Federal Aviation Administration.

*Placing blame *

But consultant Gershkoff says airlines can't blame it all on the 
weather, government and customers' desires for cheap fares. They've 
invested heavily in sophisticated technology for running normal 
operations but little on technology to help them manage the complex 
recovery process.

"No airline has a decent method" for recovering, he says. "They just 
say, 'Get these planes out as soon as possible.' There's no strategic plan."

His firm is one of several developing information-management tools that 
could help them decide faster when to delay or cancel flights, plus when 
and how to reorder operations to quickly reposition planes and crews 
where they're needed.

Sabre Airline Solutions, a travel industry consultant, says each minute 
of delay costs an airline $70, on average, and that delays and 
cancellations chew up more than 2% of airline revenue each year.

To reduce those costs and improve customer service, Sabre is developing 
tools to rearrange the itineraries of hundreds of displaced passengers 
in mere minutes.

Currently, that process can take several hours and be "quite an 
emotional experience for both the traveler and the agents helping them," 
says Gordon Locke, a Sabre vice president. "Think of it: Passengers 
could be handed their new itineraries and boarding passes as they exit 
the plane upon returning to the terminal."

Not all passengers would like the solution worked out for them by the 
Sabre technology, Locke concedes. But those who do will be on their way 
quickly, giving airline agents more time to deal with travelers who need 
to make different arrangements.


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