This article is pretty interesting. One point he makes is one that I have long wondered about: why on earth do airlines not treat baggage the same way UPS and FedEx treat packages?
Going one step further, I'm not sure what the logistics would be, but I wonder if the airlines could sub-contract baggage to people like UPS and FedEx. One of my big fears traveling is that my bag is going to disappear for days on end in the system. If UPS was willing to guarantee hotel delivery for my stuff by 8PM on my arrival day, I might take it, even if I had to pay.
@JunkDNA If I fly an airline that charges for luggage, I analyze the fees vs. shipping with UPS, FedEx, etc. and will actually use FedEx or UPS to ship my luggage to my destination.
You can look at UPS and FedEx map zones to how long it will take for your "package" to arrive from your departure zone to your destination zone.
I have sent luggage in a box earlier than my departure to my destination using the lowest cost shipping and have 99% of the time had it arrive the day I was to arrive--the other 1% it comes a day early and in that one case I called the hotel to inform them and they accepted and held the package for me.
FedEx and UPS have a vastly simpler model for package distribution compared to airline baggage distribution. Everything goes to a central hub and is consolidated and sent out directly to the regional distrbution center.
So do passengers, except on Southwest. If you fly American, you will become very familiar with ORD or DFW. If you fly Delta, you will become very familiar with ATL. If you fly USAir, you will become very familiar with PHX or CLT. Etc.
Even Southwest tends to try to funnel passengers through focus cities like MDW, but their network is largely point-to-point.
If hub-and-spoke is what would make baggage distribution efficient, WN should be the least efficient.
Yes, I was fascinated when I learned that they have to fly all the planes back at the end of the day to the ORD hub so they can be ready for the next day of flights. Which means when planes are delayed and they can't make it back to the mother hub - it puts strain on their system.
a good deal of express packages travel in the airplanes you fly on too - UPS, Fedex et al frequently buy cartons of luggage to stick on commercial passenger routes. So it's entirely possible your luggage would get there in the same plane you would too. :)
The difference is, luggage that goes with you on an airplane has different rules than packages sent via a delivery company; you can thank the TSA and FAA for that. The assumption is that a bag belonging to a passenger is more likely to blow up than a package sent via ups.
Plus, the lag time between shipping from destination is different - in an airport, you got an hour or so to get it from the check in desk, to the airplane. That's an hour in which the bags have to be sorted, scanned, loaded and then driven to the plane, where they're inserted into the hold. I would imagine that couriers like UPS do it differently: arrive at destination, sort into priority bins, scan, etc... it would be much more oriented around tipping point load - when there's enough in x, do y.
I did some development for a startup back in the .com 1.0 days that was doing just this. Name was "air valet" and they would schedule UPS/FedEx to pick-up your luggage and have it at your hotel before you arrived.
It never really took off. They targeted it at executives/first-class travelers and, at the time, most airlines didn't charge for bags.
Sound like how Ryanair (a Europe airline) work. They are one of the largest airlines in the world. They charge €20 per checked in bag. And since you can't check in online with a bag, you need to pay €20 to use a check in desk. When a flight is advertised for €15, all these extra charges all add up.
Of course most people think it's just Ryanair being mean and will complain about how they "were stung for extra charges". However, despite people's complaints, they are by far the lowest prices, and people fly with them.
I think Ryanair based a lot of their idea on southwest airlines in the USA.
Almost, easyjet and then Ryanair copied the single type, low prices and short routes idea of SouthWestern.
What they forgot to copy was the honest price, no fees policy and the extremely helpful and friendly staff of SWA and the Canadian equivalent Westjet.
What Ryan did was take the SWA idea of being profitable and added the fee structure scams of every major airline and the customer management skills of a Soviet era railway.
Actually I would say that Ryanair is the opposite model. They want to discourage people from checking in baggage, hence the fees. Staffing check-in desks and paying for baggage handling is a cost to the airline and increases turn around times as bags have to me moved on and off the aircraft. The difference is that Ryanair passengers are not, generally, making connecting flights at their destination at least not with Ryanair. They are flying straight to their destination, removing the advantages of checked baggage that exist for Southwest.
As for the fees, that is a feature not a bug. It means that people who want to fly as cheaply as possible can (no frills) and those who want the extras such as checked baggage pay. With a no fee structure, essentially the people who don't check baggage, check in online instead of at a desk, don't care where they sit (and speed up boarding times) etc are subsidising those that use those extras.
The point of the SWA article though, is that airlines don't seem to realise that people carrying masses of carry-on onto the plane slow down the boarding/exiting so much they delay the flight and cost far more money than handling bags would.
Also it isn't the baggage fees with Ryanair so much as the price you pay is completely unrelated to the advertised $1 price for the flight. You can only find all the taxes and fees once you have completed the booking - they have even sued external price compare sites which show you the full price. They are constantly being investigated for this under various Eu consumer laws.
I've flown Ryanair several times and they routinely stop people from boarding with masses of carry-on. Really, if have a lot of stuff they'll tell you to go back to check-in and handle it there.
This truly seems to cost both aggravation and time - but perhaps only for the first time. I'd hazard a guess that only a few people, of each Ryanair flight, are rookies. Most people, when faced with harsh measures, really do learn quickly. Perhaps this is, overall and long-term, a cost efficient way to do business.
Yes, Ryanair are very strict with size and number of items. You are only allowed one bag. That includes handbag. Many times I've seen women not allowed on until they get their handbag in their normal bag and both have to fit within the size.
1. Ryanair do not charge people to go to the toilet, but you might have a good idea there. Having toilets cost money - to service between flights and by taking up space that could be used for seats. Either way you pay for them, in a charge for those who use it or as part of each persons ticket price - take your choice.
2. They can will either fill it with cargo or leave it empty depending on demand. In the first case, Ryanair get paid to transport it and in the second the flight will use less fuel. In either case, the result is cheaper tickets for passengers.
Wikipedia suggests that Ryanair release these outlandish ideas once in a while to get some free publicity. While I obviously can't verify that I'm personally inclined to believe it. Since even restaurants have regulations which force them to have toilets when they are over a certain size I can't imagine this idea would be legal. If it is then it'd only be a matter of time before someone who had one too many coffees before getting on board sued them for breaching their human rights by not letting them go to the toilet!
I'd agree Ryanair take the opposite model from what was described in this article but they have also highly optimized their approach. No seat back pockets for you to dump your rubbish etc.
If it is then it'd only be a matter of time before someone who had one too many coffees before getting on board sued them for breaching their human rights by not letting them go to the toilet!
You could avoid that by making it a rebate - pay the usual price for the flight, then if you don't use the toilet at all you can claim x back afterwards.
I have to disagree that WestJet is the Canadian equivelant to SWA.
Though they don't charge for baggage, they do charge you for a seat... after you've bought a ticket!
So after you've bought your ticket, you have to pay a $10+ charge to purchase your seat.
In terms of single type, domestic only, cheap tickets and informal staff they do.
They do still do seat numbers unlike SWA/Easyjet - don't understand why. Yes if you are flying long haul with a family you want to sit together, but a typical 1-2hour hop you just waste time getting up and down to let other people past. You still end up changing seats anyway as they shuffle people around to put families together or deal with unsuitable people in exit seats.
If you want the luxury of choosing a specific seat, you then have the option of paying an additional $10 to be assigned the specific seat that you so desperately need.
Other airlines do this too - it's not unique to WestJet.
To be honest, if the flight was less than about 2 hours i'd probably take my chances as I boarded. More than 2 hours and i'd happily pay $10 to get a decent seat.
Ah yes, Ryanair, beloved by economists and libertarians all around for charging for every damn service and for seriously contemplating charging its clients for in-flight bathroom use.
Not really. WN does not charge any fees, other than perhaps change fees on deep-discount fares. What you pay is what the trip costs; there are no hidden costs.
This is probably why most people like WN a lot -- their soft product is awesome. (Their hard product -- the planes, not so much.)
Transferring bags between identical planes will decrease risk but it won't eliminate it. Unless the same people are transferring (and hence the same bags) then the number and size of bags is going to change.
Presumably people are transferring to the new plane from many different flights, flights have varying numbers of people, people have varying numbers of bags, and bags vary in size.
For example, a few flights into Miami may be only 1/4 full of people but they are 1/2 full of bags because the Miami flyers tend to carry large gear such as golf clubs and scuba gear. If you transfer those people onto a flight to the Bahamas, along with a few folks from other flights, then you might run into a problem.
Maybe it's marketing genius, but I don't understand some of his reasoning.
Obviously all the airlines don't want anyone carrying bags on the plane. Why is having a consistent load factor an enabler for Southwest to fly checked bags for free? Why does it matter that the bags are being moved between the same types of aircraft?
You could equally well imagine the argument that it makes sense to use an "agile" strategy in which aircraft with different load factors are deployed based on the type of travel expected.
I'm sure having only one aircraft and picking routes for which that aircraft is suitable has tons of benefits for Southwest, but his blog doesn't explain why that is an enabler for the free checked bag policy (other than creating efficiencies which generate enough profit to offer any perks). Would it be "marketing genius" to offer free meals on planes?
The airport charges the airlines for handling bags, only a couple of $ but the cash strapped airlines want to get that back from you and by the time they have collected the money and processed the fee it ends up costing them $10-15 so they charge you $20-25 - this makes their little MBAs heart's sing
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What they don't realize (presumably never having flown cattle class) and Southwestern do - is this means everyone carries a roll-on bag and spends 20minutes trying to fit it into the overhead and another 20mins trying to get it out - so the airlines has saved a $1 handling fee but has a plane tied up for an extra 30-40minutes at the gate, costing $50K/hour!
What actually happens on most airlines is they end up gate checking your bags anyway. This means they need more ramp staff to handle them and have an even longer delay as everybody climbs over each other on the jetbridge trying to find their identical roll on.
He explained it in the paragraph that starts with "Other airlines either don't get it, or can't" - different-sized planes accomodate different amounts of luggage per passenger, so there's a risk that they'll run out of room for all the baggage when passengers transfer to smaller planes. Identical planes eliminate this risk.
I didn't realize that when your luggage is 'lost' on a multi-stop flight, it could actually be a deliberate decision on the part of the airline due to lack of capacity. I'd actually rather they told me that.
Plus many carriers store luggage in 'cartons' - metal containers with the bags stacked inside. These are put on with a special forklift thing. Essentially offloading all of these can happen fast. If you are being super smart, you can stick connecting flight backs in these cartons, and literally just drive over to the next flight and load.
Right. But the different types of planes are going to different destinations. So you would fly your 737 to your hub and then use a plane with more cargo space for the flights expected to have scuba gear or skis. In this way a mix of planes might be more efficient.
Having a more varied fleet would be vastly more expensive for Southwest to maintain, because they've bet heavily on having fleet consistency. Their ability to handle baggage easily is only one aspect of this, and probably not the biggest one (I would guess spare parts is bigger). Other airlines that already have a varied fleet might be able to pull it off, but there's still large logistical issues.
All of Southwest's planes are interchangeable. They only need one collection of spare parts for maintenance. If one plane needs to be taken out of service, it can be replaced by any other plane in the network. They only need one type of spare plane at each airport to cover contingencies. Their pilots and crew can all be re-assigned with negligible attention to specialization, certification, or even number of crew per flight. Any place that has a SWA connection will always have the correct capabilities for any flight that goes to or through that airport. They can make logistic changes to their network without considering compatibility issues.
Compare this to an airline that dynamically re-adjusts the type of plane. You generally don't know baggage capacity until shortly before takeoff (unless you want to make everyone declare far in advance, which is itself a burden on travelers). This means that you need to either keep a bunch of spare planes of varying types at each airport, or fly empty planes around to meet demand, both of which are expensive. You also have to deal with, say, Denver having more 737s going in than out, and extra 757s piling up in Maui. In order to correct that you need to either fly empty planes, or use the wrong type of plane on some flights, probably over-large ones. Basically, airplanes are too big and expensive to realistically adopt "agility" as a business strategy. The overhead for preparing for/dealing with statistical anomalies piles up fast.
Southwest's airplanes aren't quite identical. They fly 737-300's and -700's. The 300's are a bit smaller, with a lower service ceiling and a shorter range. At present, the 300's also have older avionics. They are not completely interchangeable.
Still, maintaining only two types of airplanes that are very close to the same size and specs is a lot easier than maintaining ten types of airplanes with very different sizes and specs. The extra expense of sending a 700 on a flight that's only full enough to require a 300 (because they need a 700 on the other end) is much smaller than, say, the expense of flying a 747 for a route that only needs a 737. The extra expense of bumping one or two people (and giving them free flight vouchers) to free up a slightly larger plane for a different route is also quite small.
As you correctly note, there are a lot of efficiencies that come in to play from having a nearly-uniform fleet.
"Why is having a consistent load factor an enabler for Southwest to fly checked bags for free? Why does it matter that the bags are being moved between the same types of aircraft?"
Having the same airframe means no surprises when loading baggage. This is huge when transferring planes: if both are the same type then every bag will make the transfer, if not, some will and some won't. This enables SWA to encourage checked baggage since they can pretty much guarantee that your bag will make the trip without having to spend additional time at the gate to offload passengers who carry-on all of their bags.
One risk is not being able to transfer luggage from one flight to the next, and if this happens then the airline loses money by having to fix the problem.
One of the biggest costs for an airline is fuel. By reducing uncertainty in load, this makes planning less risky and the company can make better decisions.
This reduces the cost of checked luggage, which they can then turn into a competitive advantage. Customers can check in their baggage without additional costs. Checked bagged is more efficient to load, hence the planes can be loaded and unloaded more efficiently, so more flights can be made.
I don't understand the point on hedging. Both turning an aircraft around faster and a successful hedge on jet fuel result in higher profit. But not sure how the two are related?
Regarding hedging, Southwest gets too much publicity for being so slick to hedge fuel before oil prices shot through the roof years ago. Hedging is not part of its core competency, or at least it isn't unless they are pioneering a new business model of providing a service and then leveraging for profit on the futures markets. As in, they could have lost money on the hedge as well. Unless Southwest could use their understanding of the airline industry to predict a huge rise in oil demand, hedges should only be used as a tool to smooth out expense lines.
Here's an oversimplified example to illustrate: A gas station owner hedges oil futures. Might be smart because he isn't going to change his prices every day to reflect the spot price and customers appreciate it. He has a better forecast on his profitability because his expenditures are smoother. But it isn't really his core competency to predict oil prices.
TL;DR: Hedging can really help your profits but you don't read about the companies that lost money on hedges. Maybe Southwest was able to build a team of brilliant market researchers but I'm not sure it's a good idea for every company to buy futures.
The hedging point is just another of the unsubstantiated assertions he makes. As you say, there's not even any reason to mention hedging. If they use less fuel they make more money independent of their mechanism for better knowledge of their future price of fuel.
More consumers are using kayak, bing/travel, and other flight aggregators. Airlines are competing on the price of tickets so they tack on extra charges at checkout. Southwest doesn't play in the aggregation game so they can factor the price of storing luggage into the price of the ticket. Southwest doesn't want to commoditize their product by making their flights available to aggregators and part of that is offering a differentiated consumer experience.
This isn't the point that the author makes but could explain Southwest's strategy with luggage....
It's my understanding that the majors make a ton of revenue off the checked-bag fees. That's why they do it; even though it encourages people to carry-on, and that decreases plane utilization (longer turn times), it still makes them money.
(It also encourages airline loyalty. Fly 25k miles on one of the legacies, and now checked bags are free. I stick with the legacies because of the great loyalty programs and the ability to use the same airline domestically and internationally. It is also nice to have an assigned seat.)
I wonder for a long time now what Southwest is going to do when they will have to replace 737s finally. At some time at the future they will have depart from old and uneconomical (by future standards) design and at this instant they would have second incompatible plane operating in parallel and dramatic cost increase.
Interesting, but does he really check baggage when flying for business? Waiting for the bags takes a lot longer than waiting for people to get their bags off the plane. Checking might speed turnaround for Southwest, but it slows things down for passengers.
The only time I check bags is when flying with my wife and daughter...
So passengers spend between 30-40 minutes loading and unloading their carry on luggage. By checking in those bags the airline saves time, but what about the resources (employees) it would take to check those bags and to load/unload them from the airplane.
30-40 minutes? What kind of passengers have you been travelling next to? I travel exclusively with carry-ons--I haven't checked baggage in over 5 years--and it has never taken me more than 90 seconds total to get one carry-on into the overhead compartment, stuff my backpack under the seat in front of me, and sit down.
The 30-40 minutes is not per passenger, but how much time is wasted overall in the loading/unloading process with carry-on baggage. The theory is that if no passengers had carry-on baggage the load/unload times would be reduced to near zero and turnaround times on the ground would be minimal thus reducing cost. For each person with a carry-on that turnaround time increases thus costing the airline money.
Next time you fly time how long it takes for the first person to get on the plane until the last person boards and vice-versa. That time should total to around 30-40 minutes.
Ah, I see! That makes much more sense. Thank you for the explanation.
I'm very reluctant to consider checking baggage again, even seeing the increased level of concern a company might give my bags. I hear so many horror stories, and as an individual traveler, checking baggage is extremely time-consuming.
A few months ago, I waited with my mother at baggage claim for 3 hours before they finally determined that her bags were in a different state. Even when things are running as expected, it takes an order of magnitude more time to get in and out with your bags.
Actually, it is surprisingly serial, especially for getting off the plane. I've sat in the back of an airplane for 30 minutes while one person at a time gets their stuff out of the overhead bins, because you can't pull your suitcase down until there's room on the floor for it. If you tried, you'd whack someone on the head who got out and stood in the aisle.
I've always wondered why Southwest or some Airline startup couldn't take a 737, add second deck of passenger seating in the lower half of plane, where luggage goes, add HVAC, exits, etc. then make everyone carry on 1 luggage for commuter / weekend flights.
I take it you've never been in the lower "half" of a 737.
Passengers actually sit with their bellies about at the midpoint of the jet. The area below the floor is about the same size as the overhead bins. It's really not suitable for anything other than bags.
There are a couple of larger models where the crew rest area is in the cargo hold. It's a removable unit the full width of the plane - equal to two of those 5sided luggage pods and is very comfortable.
Airlines looked at using them as sleeping berths for first class passengers but it's difficult to meet the escape time requirements.
Although you chances of exiting the aircraft in 90secs if it crashed in the middle of the Atlantic in the middle of the night are pretty small - the FAA has to pretend it's possible.
Although you chances of exiting the aircraft in 90secs if it crashed in the middle of the Atlantic in the middle of the night are pretty small - the FAA has to pretend it's possible.
What? This requirement is actually quite important. Take a look at:
I followed a few links and skimmed the full report, but couldn't find the time it took to evacuate. But it was under 90 seconds, even with several exits not usable. Since the aircraft was already burning before it came to a stop, any time savings was critical to ensuring survival. And everyone did survive.
So I think this regulation is important. If there was just one exit, and it was blocked, there would have been 300 people dead in a fire instead of 0.
Yes evacuation on take off and landing is very important.
However the regs don't differentiate about the stage of the flight, even if you were only allowed to use the bed during cruise, at 30,000 over the ocean - the same time applies.
You are downstairs in your bed, when the cabin depressurizes and you can't move around. The depressurization also damages the flight controls, making a clean landing unlikely. The unclean landing occurs, the plane catches on fire, and you burn to death in your bed because "regulations are silly".
Going one step further, I'm not sure what the logistics would be, but I wonder if the airlines could sub-contract baggage to people like UPS and FedEx. One of my big fears traveling is that my bag is going to disappear for days on end in the system. If UPS was willing to guarantee hotel delivery for my stuff by 8PM on my arrival day, I might take it, even if I had to pay.