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Continental divide

For Americans flying on foreign carriers, the experience can feel like they're movie extras in Back to the Future: 20th Century.

There are reports of complete and delicious meals eaten with metal utensils. Free beer and wine. Two checked bags at no additional cost. Tray tables that stay locked, seats that remain upright.

In an e-mail to the St. Petersburg Times, Carol Johnson of New Port Richey voices what many travelers wonder these days: "How can other countries fly a person in a well-maintained plane with courteous, friendly attendants and we can't?"

She praises a Scandinavian Airlines flight from Copenhagen, Denmark, last year on a spotless jet. Attendants brought hot towels before the full meal. There were other niceties.

"Things sure changed when we arrived at Dulles (and connected on a domestic carrier). We used to be the greatest country in the world with the latest and best of everything and it breaks my heart to see what is happening to us," Johnson writes.

Several factors have converged to push foreign carriers ahead of domestic airlines in terms of the service they give and the experience we get. Travelers are getting to their destinations safely, but the quality of the time in the air varies greatly.

The bad news: Skyrocketing fuel costs will likely prevent much improvement.

"I had always regarded Japan Airlines as my preferred airlines but last year I added Qantas to my (very) short list and now British Airways," says Terry Duncan, 80, of Hudson. Of U.S. carriers, the retired Army officer's preference has dwindled to Delta.

Like Carol Johnson, Duncan asks: "How do the other countries provide such good service when we do not? It can't all be related to dollars and cents."

In several ways, it can.

Two industry analysts, one a spokesman for the airlines, the other a consumer advocate, provide clues about the chasm. Both say age of equipment and labor costs are among the biggest reasons. Fuel costs have exacerbated the situation.

Costs and competition

In general, foreign carriers fly newer planes that get better gas mileage, says George Hobica, founder of Airfarewatchdog.com. Only now, he says, are U.S. airlines beginning to retire some of their "gas guzzlers."

"Imagine if you were driving around in a 1955 jalopy that broke down all the time and got 5 miles to the gallon," he says.

Just last year, the airlines notched slight profits, finally bouncing back from the post-9/11 free fall, says David A. Castelveter of the Air Transport Association, a trade organization that represents U.S. airlines. This year, profits were predicted to grow again but fuel increases hit hard. Instead, the airlines are likely to lose as much as $14-billion, making 2008 their worst year ever, he says.

"Orders for new planes with better gas mileage have been canceled," Castelveter says.

European carriers were in a better position to deal with the fuel crisis, especially because of the weak dollar. But the shaky economics are catching up with them, too. British Airways lost $54-million in the first quarter of this year due to fuel costs and wavering consumer confidence.

• Labor costs are another big difference between U.S. and foreign carriers. In Europe and Asia, health care is largely nationalized, so the airlines don't have to offer that costly benefit to employees, Hobica says. That leaves those countries' carriers more money for improvements and service.

In addition, Castelveter says, collective bargaining agreements aren't as stringent overseas. For instance, gate agents may be willing to work longer hours in Europe; flight attendants are okay with flying more routes.

• There is more competition in the American skies, which makes it difficult for airlines to raise ticket prices. Though there is much grumbling about increased fares, especially among business travelers, there are still deals out there. Among other cheapies, Hobica quotes a $204 round-trip fare from Fort Lauderdale to Las Vegas. "The airlines can't make money on that," he says.

Many foreign carriers have little or no major competition in their own countries and some get government subsidies to hold prices down.

• What Americans say they want and what they really want don't always jibe, Castelveter says. Research by the airlines prioritized customers' wish lists: (1) safe travel, (2) reliability, (3) affordable fares. To satisfy customers, the airlines stripped away food services and other extras.

"When this happened, opinions started to change," he says. People began to complain mightily about paltry peanuts and lousy legroom, as the focus of the nation's veteran carriers went from service to keeping fares low. Southwest Airlines largely escapes this particular criticism because it has been a no-frills carrier since its inception.

Less means more

Consolidations and more government regulations are hot topics in the airline industry today. Bob Crandall, former CEO of American Airlines and architect of the frequent-flier program, is an outspoken proponent of heightened government involvement.

"It's time to acknowledge that airlines are more like utilities than ordinary businesses," he said in a June speech to airline industry officials.

"We have failed to confront the reality that unfettered competition just doesn't work very well in certain industries, as aptly demonstrated by our airline experience."

Hobica is also for a more streamlined industry and applauds the proposed merger of Delta and Northwest that may come by year's end.

"Right now it's difficult for the airlines to raise fares because there's so much capacity," he says. "(Consolidation) will give them some pricing power and they can stop losing money."

In Europe, British Airways and Spain's Iberia airlines are in merger talks. Lufthansa has already joined with Swiss International Air Lines, as has Air France with KLM, the Dutch carrier.

On the other side of the aisle, Castelveter predicts that too much consolidation will decrease service to some areas, even forcing smaller airports to close. Increased fares would make flying affordable only for the wealthy.

It's a complicated situation, but both Castelveter and Hobica agree that the glamor of air travel has disappeared. Less customer service and barefoot security checks irk customers. The instability of the airline industry — thousands of jobs lost this decade — puts employees on edge.

For now, foreign carriers have a happier face. But the better question might be, will they forever?

Information from Times wires was used in this report. Janet K. Keeler can be reached at jkeeler@sptimes.com or (727) 893-8586.

Continental divide 08/08/08 [Last modified: Tuesday, August 12, 2008 6:22pm]

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